UK people, how do I buy a house?

Weex, thanks for that advice, Madchen. I am on a contract at work. I might be going to proper employment, but if this is going to be an issue that prevents me from getting a mortgage, then I might bug my employers to make this happen sooner!

Also, I know I need to hassle the government bastards about getting a National Insurance number because I still don't have one, five years later.

I also kind of need to know about timescales, is this going to take months or even years? Because I don't know the kind of time that I have right now. I really don't want to have to go back to renting in the meantime, that seems like an awful waste of money.

Basically, if the company survives the next month or two I'm pretty sure I'll be made permanent. If this is an issue, I will press them on it, so I know.

I waited until we'd seen a place we really liked (the 13th flat we'd viewed, I think) before setting the wheels in motion - I think I made an offer, contacted the unfortunately-named PMS (Professional Mortgage Services - recommended by my accountant as specialists in finding products for limited company contractors [as I was then] with a low declared salary but other income from dividends and such) and enlisted the services of a solicitor (one of half a dozen recommended by the estate agent - again, this was just me being lazy and it's probably a no-no) the same day. The deposit was 10% and came from a PEP I'd started back in my single salad days.

It was a cashback mortgage with Halifax and the cashback effectively paid for my legal fees and stamp duty. I had a fairly basic survey done through impatience and tightfistedness. The whole process was still frustratingly drawn out though - we made an offer in mid-May, it was accepted but we didn't exchange contracts until early September.

It would be very different if we went through it again (I have half the income, house prices have gone up, blah, blah, blah).

I sorted the mortgage myself by comparing published deals / prices. Plus side of this: I really understood the basis on whihc I was making a decision. Minus side: it's a bore and a chore and I wasn't sure I'd covered all the bases. I left the mortgage sorting a little too late, though, because it was a chore, and the sale was held up by a week or so as a result. If I were doing it again I'd ask all my friends and get a recommendation for a mortgage broker they trusted.

Nothing too serious though: the period from having my offer accepted to completing the sale was 6 or 7 weeks, which was helped by the fact that I used the same lawyers as my vendors (after making sure they had proper separations in place obv) and no chains being involved either side.

unfortunately everything has gone rather quiet at the moment (ie the last month pretty much). our solicitors claim it is the other bloke's solicitors and, however well meaning it is meant, i think i may PUNCH OUT the next person who ask me "Hows the house coming along?" (even though it's not their fault, obv.)

kate, the bigger deposit you have, the better deal you can get, our mortgage is based on a higher multiple of our incomes because we've got a large deposit.

I was on a limited company IT contract and the way they worked out how much to lend was your weekly rate * 46 (to give annual total) and then 4 and a half times that. This was with the Woolwich late 2002 and the terms may have changed since then - they may be more cautious now.

I'm terrified of chains. (This is the only thing I've learned from watching property programmes on the telly.) Fortunately, I'm a first time buyer, so there's no chain involved.

I have, very fortunately, been offered some financial support from my mum WRT the deposit, so I might just be able to manage 10% if the exchange rate improves.

The whole thing terrifies me. I'm not even sure I've produced enough of a financial trail in the UK, as I've only been here 5 years, and never even had a credit card before, let alone a loan.

I'm officially Middle Aged and Middle Class.

Sigh.

I was on a limited company IT contract and the way they worked out how much to lend was your weekly rate * 46 (to give annual total) and then 4 and a half times that.

Bloody hell, no wonder the market's out of control! I could've bought a mansion with that kind of loan; as it was I think I borrowed 2.1 times my income based on your calculation.

Hmmm...maybe I should start a thread on remortgaging...

I've just realised this comes straight from the Scottish perspective, where you might see a house, find out that bidding closes tomorrow and need to be in a position to tell your solicitor to shift his arse pronto. I found out on the Friday afternoon that I had to have my offer in by noon on the Monday. And I was at ATP. Fun times!

I think the answer is no.

Pink, that's what I'm scared of WRT chains!

And no, you can't get a mortgage for a houseboat. I already looked into it. Which is stupid, considering that what you need the mortgage for is the mooring, rather than the boat.

It seems so extreme though - you're effectively using the equity your property has accrued as the deposit on a new mortgage, so any profit you would have made in selling the place has gone. Is that right? And borrowing against this increase in value - how well does that pan out? Better than any unsecured loan you might get from a bank? Reduced new mortgage repayments + loan-against-capital repayments = back where you started? Of course, the loan would enable us to wipe out credit card debt, get new central heating, buy robot cleaner, install radio telescope in garden, etc.

I guess remortaging makes sense if time you've lived in house equal to or less than time you intend to remain living there (and prices keep going up).

ie WE'RE FUCKED.

(independant financial advisor, kate)

you can, of course, go and talk to one, find out what the best mortgage is (for nowt) and then talk directly to the lender yourself :)

and this is why the housing market/economy/moral fibre of our once great nation is up the spout (only kidding dear ;))

I was thinking the London-Brighton commute would be bearable three days a week, but five days a week (which is what I would need to bring the flat price into the 4 times my salary range) would be pushing it.

I've got your email, cheers, Pink (thanks everyone for the great advice) - I will have a think about things (and talk to some people) and I will definitely be asking for more advice and help. Thanks!

x-post, that would be great, ___.

But the latter is unlikely to happen at all, and the rates are unlikely to be reached before the end of 2005.

The Bank of England are not in the remit of controlling house price inflation, although you can tell they want to as it is a big risk. all the same, they have to argue all rate increases around a 2 year inflation target based on HICP which has no house price element in it, thus reducing their motive.

The BoE is unlikely to move rates in a haf percent jump. And even then I am not too sure how far this will push many folk (it is only the small percentage interest component, many people fixed in at historically low rates). It is more overall consumer borrowing on top of mortgages that are a worry.

Sorry, I feel like the pub bore now. No, the growth is not sustainable, but interest rate damage will not be that serious.

Please don't worry about sounding like a pub bore, for a start, I asked the question with the specific point of finding out things like that, that I hadn't even thought about. (Weex!)

It seems as if you actually know what you're talking about, as opposed to people who sit around with no knowledge, making pronouncements about how the government/economists/Thatcherites, etc. are trying to mess us up. ;-)

Anyhow, feel free to mail me if you want to ask stuff about different areas of the city or whatever. Might not get back to you straightaway though, I'm just off to have a bad tooth pulled. Oof.

I want a pokey little flat, just for me. Maybe you should email me the details of your place! We could have the first ever all-ILX exchange of house contracts, and instead of estate agents fees, we pay to fix the server! ;-)

The offers over thing here in Scotland is horrible especially with the house market having exploded like it did. People were offering silly money over the asking price for things that weren't worth it. On the plus side you don't seem to get these precarious chains up here.

We were just lucky that the house we got had a seller who was moving back in with his wife so wasn't looking to buy and he was making a £25000 or so profit (having been there a year!) even if we just matched the asking price so we got it for £5000 over asking price and £5000 under valuation. Bonus.

Mind you this was after a year of much stress trying to find something. Completed in 6 weeks and the solicitor was really rub.

Not looking forward to ever doing this again

Hooray Mike Pam and Ava.

Nah, typical estate agents' fees are between 1.5 and 1.75%. Still a terrifying amount of money for something you suspect you could do yourself, quicker and better.

I just don't have such generous parents as you, I'm afraid.

With me, it was the generosity of the nuclear industry (hello, Cumbria!) that enabled me to come up with a deposit. My parents have been council/housing association tenants all their married life (aside from 18 months living with my maternal grandparents). I guess they could've spared a tenner if I'd really pushed them.

I'm very keen on the idea of lodging in central districts too - but only in my imaginary parallel life, where I'm still single and I don't have a child. (Not that it can't be done with spouse and sprog but, Christ, where would we put all Pam's sewing supplies?)

IT WILL BE MINE ALL MINE ON WEDNESDAY!!!!!

My god, I'm poor now. I've rejoined the landed gentry. Heh heh.

We didn't get the house :-(

What happened was that there was no other interest, so we said to the seller's agent "would she accept "offers-over" price + 15%" and they phoned us back and said "um, someone else just offered more than that, do you want to offer more" (er, isn't that some sort of gazumping thing?) and I said "er, we'll get back to you but let us know if it's going to a closing date" (because that's what you do if there are two interested parties) and then I didn't hear anything for a week so I called the agent back and she said "oh, she accepted the other offer, I assumed you weren't going to come back with a higher offer" - um, IT DOESN'T WORK LIKE THAT. Aaaargh. (we would have offered more, but I had to get the house valued and get a revised mortgage agreed in principle, I couldn't just magic up an offer in case we couldn't afford it)

actually you can

you put in the offer. and go ahead with things, you can pull out at any time if you change your mind

What happened was that there was no other interest,

and they tried to put up the price??? LOL. if theres no interest its because its overpriced. the estate agent will be bulshitting you as well, remember

remember you hold the cards, not the seller. people are worried prices are going to start falling (already have in some parts of the country), plus you have a million houses you can go look at, they only have the one they can sell

There hadn't been any interest for weeks, then after we put in a testing-the-water verbal offer, another offer came in from someone else within about half an hour. The seller's accepted that one because I took my time getting back to them (but if we've noted an interest, they are supposed to keep us posted on any moves made by any other interested parties). We're knacked, basically, because we weren't being held to ransom and I assumed it would go to a closing date and offers if there were two genuinely interested parties (and we'd had it surveyed, so I think that should count as interested)

true, but if there hadnt been any interest in weeks, it suggests it was incorrectly priced (other offer notwithstanding). other thing you can do is keep tabs on what happens with this price, the other buyer may well pull out (esp with interest rates continuing to rise and banks beginning to tighten credit)

how do you think it was priced, in relation to other similar houses?

Aye, I've told them to keep me posted if it falls through, since I was prepared to offer a wee bit more if I'd had the chance. I think it was fairly reasonably priced, but there were reasons it wouldn't appeal to everyone.

Ach, plenty more houses for us to look at.

have you checked ourproperty.co.uk to see what prices on that, and other, streets have gone for, over the last year or so?

Yeah, well nethouseprices.com which is the same idea. It was a reasonable price (but we were erring on the low side of an offer since we were the only interested party), and our bank had it surveyed for mortgage purposes as well. Basically, the Scottish system of second-guessing what people actually want for their house sucks.

i dunno, no interest to me says one of 3 things

1) something wrong with it
2) overpriced
3) not enough demand in general, and if thats the case, they're ALL going to be coming down

presumably your mortgage is in place now (prolly have to begin sometime in the next 3 months?) - so you got time on your side

Sorry to hear that Ailsa. The second guessing in the Scottish system is a pain in the arse - I suspect that i most likely paid over the odds for my place. I am heartened to see from nethouseprices.com that my flat is worth roughly twice what I paid for it 5 years ago.

On a vaguely related note, I was a little perplexed to see a Mini with Foxtons livery parked outside my flat - I thought they only operated in London.

I used to think that the scottish system was so much better than the english, but I've revised that since hearing about my friend's experience. They're looking to buy a house in Linlithgow (they own a flat there, but are expecting child no.2) They put in an offer that was 15% over the asking price (I think their offer was about £235K) they found out that they were 6th out of the 10 couples that put a bid in, and then found out that someone else was unsuccessful with a bid of £275K!!!!!! Their mortgage co. had valued it at £220K.....

Aye, that's the sort of thing we're up against. We've been told we'll easily get 25%+ over the asking price for our own. It was a verbal offer of asking price plus 15% that we had knocked back for the new place. Having to throw survey costs at every house we want to put in an offer for and then not getting it anyway because we're not mad is giving me TEH FEAR.

oh wait, you already own a place? why dont you sell that and go rent for a while? that way you dont get held up at either end, and its cheaper to rent than buy anyway, and prices arent exactly going up?

and dont the surveys come after the offer has been accepted (or is that different there than here?)

That's what we're going to do, but I *really* wanted this other house. Obviously, renting will be cheaper than paying for the new place, but I don't think we'll ever get more for this place than we're going to get right now, so we're taking our money and running, and unless we get a place we want at a price we can afford, we're as well treading water in a rental place with our profit in the bank.

xpost - you can offer subject to survey, but a mortgage lender will still require a survey which is free if you take their mortgage but if you don't get the house you don't get the mortgage means you have to give them money.

renting with profit in bank at top of market isnt exactly treading water:D

if this is the most you're going to get for your place, then surely it follows that the same is going to be true of other places

have you got your mortgage in place though? because the flipside to any stagnation or fall is rates continuing to rise and therefore getting more expensive to borrow money, and banks are starting to lessen the amount of money theyre lending out as well. if youve got one in place that should be valid for a while at least

Yeah, we have. We're not interested in over-borrowing anyway, we're still looking well within what we can afford, none of the "6x salaries for the rest of all time" nonsense here.

makes sense! probably beginning to see the end of the silly multiples now, which means less credit and money stoking things up

We're house/flat hunting. I think my head is going to explode. Urgh. We're basically looking for sth to buy and then rent it out. ARGH. I am new to this and don't know anything about it. :-(

Now is perhaps not the best time to be looking at buy-to-let.

let-to-sell is good though.

Basically, rent a house then sell it to someone else and leg it.

It's all good.

Belgium is probably a better place to do it than britain.

Well, my PIL will be helping quite a lot. In the long run it seems a good idea. We're self-employed so when we retire we'll get fuckall. So we need to see into something that will bring in money or at least have something of our own. I'm keen to get a flat or something. Buy and then rent out: only need to pay a couple of hundred euros/month maximum. But that's of course when we find good renters. *sigh*

Mortgage rates (?) are pretty good here. They've gone up a bit but it's still very reasonable.

Mark, fuck, why didn't I think of that? Do you have a place to hide?

Aren't you living rent-free right now as well?

Yep, rent free. This is of course a BIG PLUS but on the other hand we realize this can't go on forever and ever. (Although my mom told me ages ago she wants to give the house. Which is of course great! *If* that happens.)

Don't you have private pension schemes you can pay into in Belgium? If you're not sure you can recoup all your costs via rent, wouldn't you be better investing the money elsewhere?

we already do that.but we want sth extra.

as long as you're not looking to flip it within five years i'd imagine a house is a very good investment.

We're not looking for something to sell again in a few years, just something as a "backup" (if things go awry and we need to move out of the house) or to rent out (which would mean a good income later on, when it's paid off),... If we don't go overboard we can more or less let the rent pay off the loan.
It's giving me mad headaches, WHAT DO I NEED TO LOOK OUT FOR? I mean, this is not a house we will live in, but something that is easy to let (?). So the rules are different, I guess...