Biggins

What is everyones take on the current housing market climate?

We want to move house as we feel the area/village we are currently in is on a slow decline. This may start to lower prices but we are unsure whether to hold on a little longer to see what the market/interest rates do, or go now. It's not that bad at the moment but I have observed the same thing happen in a neighbouring village and don't want to wait to see it happen here.

This will be the 1st move for us and a big step up from our current property. It will mean that we are stretching ourselves financially so we need to be sure to time it about right.

Current property valued : £125,750 (bought for £40k in 1998)

New property price : £235,000 - £250,0000

Current mortgage : £48,000 (£250'ish/month fixed until 04/05)

New mortgage req'd : £150,000 (£850'ish/month 2 year fixed)

Combined pre-tax earnings : £48,000

Any views? I know that there are some property/financial gurus lurking on SN.

Ted Maul

never delay getting a better home

Sub97

It depends on what sort of life style you lead. We have pre tax earnings of 44k a year and a fixed mortgage of 182k. Hopefully our money will be going up a fair bit in the next few years though as we are both at the start of our careers. Most people wouldnt want to pay such a large slice of their earnings on a mortgage but we choose to. We dont go out that often, and dont spend loads on luxuries such as expensive holidays etc, but we have a very nice 4 bedroom detached house in a nice area of Northampton, and we are only 25. To us we prefer it. Our friends mainly live in 2/3 bedroom terraced houses in rougher areas of Northampton, but have more money to spend on going out, etc. Given the two choices I much prefer our setup, but as I say you pays your money etc.

Cheers

Steve

Biggins

Steve,

I agree entirely with what you say and it will be a tough pill to swallow intially as at present we have a nice slice of disposable income each month. This will shrink by circa £600 just by the increased mortage and then there are the increased service bills that come with a bigger property. We are also mindfull of the fact that we hope to start a family in the next 3 years so will loose Jules income of £15k. My own earnings will hopefully be upto £50k pa by that point to compensate.

Big decissions!!!!

AndyC_772

iTrader: (2)

As an aside, how did you end up with a £48k mortgage on a house you bought for £40k? (Did you buy a scooby, perhaps? They have that effect!)

Mrs C and I moved to a bigger house about 18 months ago and have definitely felt the pinch financially. On the other hand, we've also really enjoyed the extra space and I'd certainly do it again. You can play the financial markets all you like, but at the end of the day you have to live somewhere and there will never be a perfect time to move. IMHO prices will remain firm for as long as there are more people wanting houses than there are houses to move into.

Bear in mind also that keeping a cat or dog is much, much cheaper than having kids! Worth bearing in mind if the house starts to feel empty...

Nimbus

Your situation and numbers are similar to our our was last year, except we already had a daughter..

My advice is that if you think price may start to drop in your area, or even just stagnate, then best to sell as soon as you can. There's nothing worse than wanting to move but can't because no one wants to buy your house (took about 3 months to sell ours and we were getting fed up by the end of it). If you sell and move into temp accomodation first before buying you will be in a very strong position and may even be able to get a better price on the one you're buying (especially if the area you are moving too is up-and-coming and there's a high demand. This may not be practicle though. Our sale nearly fell through at the last miniute before exchange, so if/when we move again we are going to wait until the monies in our account before looked else where.

PPPMAT

If you're on the housing ladder then don't stress too much. You need to get the most from your current house to pay for the new one. Likewise if prices fall you will be paying less for your new house but will receive less for your current one.

If you want to move then move. Price fluctuations only really affect first time buyers and investors

darlodge

I wish I had £600 disposable income

My set-up is the same as Steve's, our mortgage is the majority of our income (about 60%) and this leaves us little left over for extras. We would however not change our set-up. We have a 2-bed house in Sussex and we are only 21 and 22. Yes it may be a strain financially but it beats being at my parents of living in a flat with a little disposable income.

I say go for it, just make sure you don’t over stretch too much, just incase something comes up.

Darren

Ringpeas

Could you still afford the repayments if interest rates went up say 2% ?

If yes then there should be no problem.

If no, then maybe reconsider either the house, or having children.

ProperCharlie

In the situation that Biggins describes, an overall fall in house prices will leave him better off.

I moved about 18 months ago - from a 3 bed flat to a five bed house (proper job, eh? ).

I must admit that the burden of the bigger mortgage is quite a big strain - mainly on my brain as I tend to worry about "what if" scenarios). However, there's *no way* that I'd want to move back to the flat, especially now that we have a daughter. Oh yeah, that's another starin on the brain/wallet as previously my wife was earning £33k p.a. She has just gone back to work part time but is on less than 50% of her old salary as she is no longer head of department. Take away child care costs and you have about enough left to buy a packet of organic bananas (in case you hadn't realised, babies have to be given organic *everything*)

Bitter, me? Nah - I love it.

Seriously, my theory is that we will feel the pinch for a few years, but eventually inflation will eat into the cost of servicing the mortgage. I am also scrimping even more than necessary in order to have some capital to throw at the mortgage when we re-negotiate at the end of our fixed rate period (3.5 years from now).

Also, having a bigger place enables us to rent a room to my brother, which helps a bit on the financial side.

I think that's everything off my chest now...

Brendan Hughes

Did everyone else notice the relaxed use of this possessive pronoun?

Just checking

ProperCharlie

Brendan - well I hope she isn't someone else's wife...




maybe I should go back to using her old name: the trouble.

Biggins

AndyC,

Very observant sir. but i didn't buy a Scoob when we remortgaged, it went towards financing a Honda S2000.

On the finances side we should be ok even if things change by as much as 2%, although a 5 year fixed rate would combat that, just. My wife has a loan which she pays £465/month and has 2 years to run. That is the only debt. bar the usual service bills/council tax/TV licence/Sky/Internet that we have. My car is all paid for and the wife doesn't drive. We are both non smokers but do like dining out and travelling/holidays which will obviously have to be reigned in. I have my own Ltd company of which I hold 75% of shares. The business property is fully paid for and is valued at £500,000 so I do have a little security behind me if it all goes wrong.

Only problem I see now is getting a good mortgage. Looking on the Halifax site and using their calculator, based on our income and outstanding loan etc., they would only lend £125k.

Am I missing something as I thought that you could attain a good fixed rate deal @ something like x4 joint income.

Jye

I'm never that sure what to make of the 'house' thang even though I know it's a no brainer as far as investments are concerned. It just seems so suburbia all this 'ooh I must climb the property ladder or I'm worthless'. Weve never had a big mortgage and never intend to either, though tbo houses are still cheap as chips up in most as Scotland.

A house is pretty much just a roof over your head imo, unless that is your some saddo that never goes out and are content spending years being amused by talk of sorbet velour sofas and Ikea pine. A few of my m8's have pretty huge mortgages and afaiks they are totally stressed and completely miserable with worry whenever an unexpected bill turns up. They never go out now, spend every night watching the telly and doing mundane chores about the house.

I guess me and the gf just prefer to spend the <cough> 'healthy' years of our life (and cash) doing whatever gives us a real buzz in life, outdoor persuits, hill walking, climbing, motorcycling (three m/bikes now), socialising and seeing the world. I enjoy having plenty of spare cash in my pocket and am pumping enough into my pension and other avenues that money will never be a problem in old age (if I ever get there, not that I gaf ).

I guess it all depends on how you see your life (style?) panning out. For me spending all my hard earned on a 'nest' seems a bit shallow, while wasting the best years of my life just to get a ' rally nice hice' is a bit like a jail sentance, i.e you will never get the time back. So if you want to spend most of your cash now just in the hope that you can cash in and live it up when your an old wrinkly then go for it, I for one am living life for the day in case that large bus ever appears in my path

ps I dont have kids nor do we intend to. Perhaps thats a factor in the nest thing??

Brendan Hughes

all in good time...

davegtt

Jye, we all pick and choose what we want to do with our lives and money, for me having the security of paying my morgage off by the time Im 40 appeals, I know that when I have other financial burdens such as kids I'll be able to look after them under my own room and provide them a stable home unlike alot of renters etc.... then at the age of 40 I shouldnt have to worry about I need to earn x amount to pay my morgage etc... I can do that whilst Im young and should have too much worry trying to find work then in my older years what ever I earn will go towards chillin and drinking

each to their own and all that

Jye

Exactly Dave and my mortgage will be paid off when I'm 45, and I'll have even more money to squander

davegtt

how the fek do u plan on paying off a morgage by the time ur 45 unless ur earning a fortune or have other major investments (which by your original post you cant be bothered doing as your happy to spend ur money living as such)

Brendan Hughes

Well, he doesn't live in SE England...

AndyC_772

iTrader: (2)

To each their own, I suppose. I like having my space to spread out in - I've spent long enough, in poky student flats and cramped little offices, banging my elbows on clutter and feeling closed-in. Now we can afford it, Mrs C and I have room to spare and it's great.

You're right that we don't get out much, but with enough room to have our own home cinema and brewery, who needs to? Cinema tickets and pub beer are expensive!

davegtt

doesnt explain anything, most regions u need a good 100k to do something with in the housing market now. tbh its a fair bit of wedge unless ur earning some top money

Sub97

Biggins - try the Nationwide mate. That's who we are with. Got just over 4 times joint salary with them. Although we went througha mortgage advisor we'd used beofre and he got us about 8k more than they said they'd lend us through their website.

One "trick" if you're interested, is to say you'll use some of the mortgage to pay off your gf's current loan, as they take this payment into account when deciding how much they'll lend you. There's actually no legal way they can force you to do this once they've given you the money. It helped us get the little bit extra we needed for the house we really wanted.

Cheers

Steve

Jye

Dave, why not. You just said yours is going to be paid by the time your 40

My original mortgage taken out when I was 2O was for £27K (three bedroom semi), our combined income is £44K. Whats the problem

Brendan Hughes

That would have been my other answer - he's an old fogey

Jye

Yup lol

Hey, Im not 'that' old ffs

davegtt

hey u never said u got a morgage already.... arrrhhhh Im confused now, getting too hot in this damn place.

AndyC_772

iTrader: (2)

Although in fact, you'd be daft not to unless there's a tough penalty clause for paying it off early. The mortgage is almost certainly going to be at a lower rate than the loan and a lot more flexible too.

Jye

Andy m8 in no way was that a dig at you or anyone else, more at my m8's who are still 'climbing the ladder' with ever increasing mortgages. Deffo houses are the way to invest your cash, if thats what you want then fine. My m8's would never have been able to splash out on a grands worth of D70 just to faff about with and thats what I like about my piffling little mortgage.

Jye

Ah Dave, I said I never had a 'big' mortgage, not that I never had one period

jjones

but if they were to downsize tomorrow they could wipe their mortgage out, own their own smaller house outright and have a shed full of cash to spend on D70 (whatever that is).