First time buyers

[User removed 4]

As I have said for a long time 90% deals at reasonable rates would reverse the house price falls overnight. If other lenders follow HSBC in the coming weeks I think the market will slowly increase for the rest of the year. I think we are at the bottom or very near of the market.

as i have said for a long time, confidence in the market is welll and truly f***ed, you could offer 120% mortgages at 0.5 % and prices still wont go up because people are not going to buy something now which they think will be worth less in a years time.

 

[Uncle Spielberg]

I disagree. Estate agents had their best sales for 2 years last month. People are buying and avvy people realise the market is at or very close to the bottom. All the doom and gloom people will sit on their hands forever and miss out. This is the eaxct same scenario as the mid 90's when prices were rock bottom and people still did not buy as the press said prices would continue to fall. 1 bed garden flats were going around Five ways for £ 32000. People hesitated, they were worth £ 70000 , 3 years later and
£ 170000, 10 years later, still worth £ 120000 or so now. Hanover 2/3 bed houses were going for £ 50000, went up to £ 250000 now worth £ 200000.

And people need to look at more than 1 year down the line. Look 5 years.

Anyway this year will be very interesting.

 

[Uncle Spielberg]

as i have said for a long time, confidence in the market is welll and truly f***ed, you could offer 120% mortgages at 0.5 % and prices still wont go up because people are not going to buy something now which they think will be worth less in a years time.

Ok so

3 bed house - £ 200000 mortgage at 0.5% = £ 83.33 pm mortgage
rent above £ 800 - £ 900 pm

You reckon people would not buy ?.

 

[Buttinhams]

The fall in property prices is a two edged sword, as although it gives encouragement to buyers, it is stopping sellers putting their properties on the market. I know a couple who sold early 2007, but are still in rented accommodation as they cannot find a property that ticks all the boxes. As they put it quite succinctly, the people selling at the moment generally are doing so because they fall into the consequences of the DDD category - Death, Divorce or Debt.

 

[Shropshire Seagull]

Nobody has yet mentioned the role HIPs play in all this.

We sold one of our Buy-2-Lets last year (first experience of the HIP for me) - put on the market at Easter-08 and eventually completed Sep-08.

Obviously, this was in a period of falling prices and growing uncertainty, but I shelled out £400 for a HIP which only has a validity of 6 months, so if I hadn't sold within 6 months, I would have needed to shell out another £400.

Don't get me wrong, I think the concept of the HIP is sound - it stops people putting a property on the market to test the waters who don't actually have any intention of selling (time wasters), but the actual information the HIP provides, in my opinion, is not worth a great deal (certainly not £400).

The most annoying facet is that HIPs were also supposed to speed up the selling process as they included searches - not so - the buyers' solicitor still insisted they also do all the required searches (again) as this was their service to their client. Maybe this is a habit thing and confidence in HIPs will change this, but I thought the whole thing was a bit of a con and it surely must have a detrimental impact on sales (esp when the market is slow and properties often taking longer than 6 months to sell).

 

[Cadiz Seagull]

In my onion it is a big mistake, especially for first time buyers, to look on a house as an investment. It isn't. It's a home. And that's the reason you are buying it, because you like it, you like the area and you want to live there.

The chances are, looked at over a longer term, it will turn out to be a good investment but first and foremost it is a home and people should always remember that.

So you buy it and it doubles in price in 5 years. Are your rich? No. The house down the road that you now want to buy will also have doubled in price.

Lets assume you buy somewhere at what happens to be the top of the market and it goes down in price by 50% within a fairly short period. Are you broke? No. The house down the road that you want to buy is now 50% cheaper.

The ONLY time when house prices have any REAL meaning is (a) when you buy your first house and (b) when you sell your last house. As long as you stay on the housing market up and down movements have little real impact on your finances. The movement in mortgage rates is far more important.

So, when prices have dropped as they have now, especially when mortgages are rock bottom in price (any lower and the banks will pay you to take their money) that must be a good time to buy, especially if you can find a seller who has to sell and will accept a lower offer. OK, as I said earlier we may not be at the bottom of the market yet but we can't be far off. And if you don't buy now (a) you have to pay rent and (b) you get four-fifths of bugger all interest on your capital in the bank.

But, the most important factor IMHO, you don't have a home.

That's what you're buying, a home, NOT an investment.

If you are buying a second home as an investment that's a whole new ball game, but this thread is about first time buyers, most of whom are looking to buy a home.

 

[Cadiz Seagull]

And don't get me started on HIPS! If ever there was an example of Government providing a solution for a problem that doesn't exist, this is it.

 

[dannyboy]

In my onion it is a big mistake, especially for first time buyers, to look on a house as an investment. It isn't. It's a home. And that's the reason you are buying it, because you like it, you like the area and you want to live there.

The chances are, looked at over a longer term, it will turn out to be a good investment but first and foremost it is a home and people should always remember that.

So you buy it and it doubles in price in 5 years. Are your rich? No. The house down the road that you now want to buy will also have doubled in price.

Lets assume you buy somewhere at what happens to be the top of the market and it goes down in price by 50% within a fairly short period. Are you broke? No. The house down the road that you want to buy is now 50% cheaper.

The ONLY time when house prices have any REAL meaning is (a) when you buy your first house and (b) when you sell your last house. As long as you stay on the housing market up and down movements have little real impact on your finances. The movement in mortgage rates is far more important.

So, when prices have dropped as they have now, especially when mortgages are rock bottom in price (any lower and the banks will pay you to take their money) that must be a good time to buy, especially if you can find a seller who has to sell and will accept a lower offer. OK, as I said earlier we may not be at the bottom of the market yet but we can't be far off. And if you don't buy now (a) you have to pay rent and (b) you get four-fifths of bugger all interest on your capital in the bank.

But, the most important factor IMHO, you don't have a home.

That's what you're buying, a home, NOT an investment.

If you are buying a second home as an investment that's a whole new ball game, but this thread is about first time buyers, most of whom are looking to buy a home.

well said

we thought it was a good time to move from a 2 bed in haywards heath. we have a 2 year old , in my opinion haywards heath is going down hill. we need to move somewhere bigger.so we looked around found a place in ardingly which is 3 beds , quieter , good schools , nicer area, parking easier, etc etc.
we had to pay full asking price for place in ardingly and accept less than what we wanted for our current place. but as we said this isnt an investment its our home for the next 10 /15/ 20 years , who knows, and is this place worth the money we are paying for it in this respect , yes it is as we really like it.

 

[Shropshire Seagull]

In my onion it is a big mistake, especially for first time buyers, to look on a house as an investment. It isn't. It's a home. And that's the reason you are buying it, because you like it, you like the area and you want to live there.

The chances are, looked at over a longer term, it will turn out to be a good investment but first and foremost it is a home and people should always remember that.

So you buy it and it doubles in price in 5 years. Are your rich? No. The house down the road that you now want to buy will also have doubled in price.

Lets assume you buy somewhere at what happens to be the top of the market and it goes down in price by 50% within a fairly short period. Are you broke? No. The house down the road that you want to buy is now 50% cheaper.

The ONLY time when house prices have any REAL meaning is (a) when you buy your first house and (b) when you sell your last house. As long as you stay on the housing market up and down movements have little real impact on your finances. The movement in mortgage rates is far more important.

So, when prices have dropped as they have now, especially when mortgages are rock bottom in price (any lower and the banks will pay you to take their money) that must be a good time to buy, especially if you can find a seller who has to sell and will accept a lower offer. OK, as I said earlier we may not be at the bottom of the market yet but we can't be far off. And if you don't buy now (a) you have to pay rent and (b) you get four-fifths of bugger all interest on your capital in the bank.

But, the most important factor IMHO, you don't have a home.

That's what you're buying, a home, NOT an investment.

If you are buying a second home as an investment that's a whole new ball game, but this thread is about first time buyers, most of whom are looking to buy a home.

Mostly agreed, but regional variations also play a part.

Example:
12 years ago I bought a 4 bed detached in Burgess Hill for £111k
6 years a go I relocated (with work) to Telford and bought a 4 bed detached for £144k
5 years ago sold my Burgess Hill place (rented it out for a year in case I wanted to come "home") for £250k - an increase of £139k and 125% - nice!

I invested some of this "profit" by buying 3 buy-to-lets in the Telford area - £20k deposits on £90k houses.

The thing is, a % increase (or decrease) is not equal if the £ is also different (obvious - sorry) so a gain of 125% on my Sussex home earned £139 yet the same 125% gain on the Telford properties will always be less £££

So yes, when you buy or first and sell your last is very important - but also consider what happens if you move into a cheaper or more expensicve area too.

Basically, I'm gonna struggle to be able to afford to move back to Sussex.

 

[Cadiz Seagull]

Mostly agreed, but regional variations also play a part.

Yes you're right, they do play a part. And other factors come into play when you downsize - we see a lot of this, Mum and Dad have a big house, kids left home, mortgage paid off so they sell up, come out here and buy somewhere to retire to and stick the balance in the bank. Obviously better if they do this at the top of the market if they can. But many people say sod it - I want to move to the sun now and have a better lifestyle so I'm buggered if I'm going to wait three years until my house has gone back up to where it was.

But generally speaking, its only entering or leaving the market that fluctuations in prices have any huge impact.

 

[drew]

Surely we are still in a recession and we haven’t even reached the worst off it yet. Unemployment is still pretty low compared to the main European countries. UK is 6.5% (I think), Germany is 8.5% and Spain is 15%.

At some point we will probably go off to the IMF for a loan. I'm thinking of buying a house just after Christmas with a sizeable deposit.

Depends who you listen to. The guy that is about to join the Bank of England monetary policycommittee, David Miles, is actually quoted as saying the recession has bottomed out.

Okay an example. This one I know off, but I'm sure there are thousands like it.

£220k mortgage through a brooker on £220k property 2 or 3 years ago on fixed mortgage. Had to "self cert" ie lie about income to obtain property.
Needs to remortgage, can only borrow 80%. House is now valued at £180k, ie can only borrow £150ish so is about 65-70k short. Changed jobs, and has no fixed regular income, so needs to self cert again. Brooker who 3 years ago was as welcoming as can be, now "can't help you. Bye"

So people who have had there buy to lets, or even property they lived in for 7-8 years, and have a say £150k mortgage on property worth say £180 will properbly be thinking about getting out and at least getting some money back. Bearing in mind thousands flocked to the easy money schemes that buy to lets were at the time, many used the equity in their houses to get the deposit to buy-to-let, so will they risk everything, or get out now while they still show profit?

If its your home, like in the case above, it gets repossessed. People that were stupid enough to do this in the past couple of years are f***ed.

If this happens widespread, which is slowly happening, people will panick, and there will be a flood of properties on the market, and I think this is where the prices will plumet in a short space of time.

Not forgetting mortage rates are 0.5% and cannot stay at this rate for long. Its a quick fix, that will have to be paid for later.

Difficult to feel sorry for someone who lies on such a risky venture.

In my onion it is a big mistake, especially for first time buyers, to look on a house as an investment. It isn't. It's a home. And that's the reason you are buying it, because you like it, you like the area and you want to live there.

The chances are, looked at over a longer term, it will turn out to be a good investment but first and foremost it is a home and people should always remember that.

So you buy it and it doubles in price in 5 years. Are your rich? No. The house down the road that you now want to buy will also have doubled in price.

Lets assume you buy somewhere at what happens to be the top of the market and it goes down in price by 50% within a fairly short period. Are you broke? No. The house down the road that you want to buy is now 50% cheaper.

The ONLY time when house prices have any REAL meaning is (a) when you buy your first house and (b) when you sell your last house. As long as you stay on the housing market up and down movements have little real impact on your finances. The movement in mortgage rates is far more important.

So, when prices have dropped as they have now, especially when mortgages are rock bottom in price (any lower and the banks will pay you to take their money) that must be a good time to buy, especially if you can find a seller who has to sell and will accept a lower offer. OK, as I said earlier we may not be at the bottom of the market yet but we can't be far off. And if you don't buy now (a) you have to pay rent and (b) you get four-fifths of bugger all interest on your capital in the bank.

But, the most important factor IMHO, you don't have a home.

That's what you're buying, a home, NOT an investment.

If you are buying a second home as an investment that's a whole new ball game, but this thread is about first time buyers, most of whom are looking to buy a home.

Couldn't agree more. It is the biggest investment most people ever make and you should look at it as your home, especially if you have a family. You should only gamble on something risky if you can afford to lose your initial capital.

 

[Mr Burns]

They would go on the SVR which is most likely to be less than the fixed rate they were on.It is not the brokers fault there is not enough equity anymore. Come on. The broker is right he cannot re mortgage them. I think you are barking up the wrong tre and if the broker " lied " so did the clients so its a bit rich laying all the blame with the broker.

I think you've picked up on something there that I never said. I'm not blaming the brooker. Although when money was flying about, they allowed or encouraged people to write down a figure needed to obtain the loan. It's as much the person who took the mortgage's fault, as much as it is the brooker and the bank. The banks knew it was widespread, but allowed it to happen, and thats the main reason we are in this mess. People borrowed far more money than they could pay back.

My point is, there are thousands and thousands in this position now, who are on 2 or 3 years fixed rates will not be able to get new mortgages, because the properties are worth enough, and unless they can find the shortfall of tens of thousand of pounds, house will be repossed, and I think this type of thing will explode later this year, and the house prices will plumet.

Sure they'll bounce back somewhat in the following years, but they will never go back to the levels they were at, and this is why many people with 2nd homes, will jump ship take the small profit they have left, and this will only add to the falling prices

 

[Blue&WhiteSea]

Just completed today on my first house! Managed to get on Britannia's SVR motgage at 90% before they pulled it and am now shitting myself that interest rates are going to start going up again!

 

[Mr Burns]

They would go on the SVR which is most likely to be less than the fixed rate they were on.

Much they won't get an SVP or any mortgage, if they property is worth 200k and they need to borrow 250k to clear their old mortgage. That's why 100% and over mortgages at a time the market was over priced, was boarding on criminal.

 

[Blue&WhiteSea]

Just checked out the 90% deal HSBC are doing for FTB £1499 booking fee! they are having a laugh!

 

[Mr Burns]

Ok so

3 bed house - £ 200000 mortgage at 0.5% = £ 83.33 pm mortgage
rent above £ 800 - £ 900 pm

You reckon people would not buy ?.

That looks very nice. But totally misleading.

Come on, you show me anyone who can obtain that mortgage.

Sure there are people who have them on exisiitng loans, but no first time buyer, or remortgager will get a rate anywhere near that.

If you can find me a mortgage like that, I'll give you 10 grand finders fee!

 

[Uncle Spielberg]

That looks very nice. But totally misleading.

Come on, you show me anyone who can obtain that mortgage.

Sure there are people who have them on exisiitng loans, but no first time buyer, or remortgager will get a rate anywhere near that.

If you can find me a mortgage like that, I'll give you 10 grand finders fee!

This was in response to Bushy's post and scenario

 

[Uncle Spielberg]

Just checked out the 90% deal HSBC are doing for FTB £1499 booking fee! they are having a laugh!

Or 5.49% with a £ 299 fee I think.

 

[Uncle Spielberg]

I think you've picked up on something there that I never said. I'm not blaming the brooker. Although when money was flying about, they allowed or encouraged people to write down a figure needed to obtain the loan. It's as much the person who took the mortgage's fault, as much as it is the brooker and the bank. The banks knew it was widespread, but allowed it to happen, and thats the main reason we are in this mess. People borrowed far more money than they could pay back.

My point is, there are thousands and thousands in this position now, who are on 2 or 3 years fixed rates will not be able to get new mortgages, because the properties are worth enough, and unless they can find the shortfall of tens of thousand of pounds, house will be repossed, and I think this type of thing will explode later this year, and the house prices will plumet.

Sure they'll bounce back somewhat in the following years, but they will never go back to the levels they were at, and this is why many people with 2nd homes, will jump ship take the small profit they have left, and this will only add to the falling prices

Firstly why do you keep referring to me as a Mortgage Brooker ?.

Secondly why do they need to get new mortgages they already have a mortgage with their present lender. They do not have to re mortgage do they. they will go onto the lenders SVR or their lender will most likely offer them a new fixed rate. What they can't do it shop around but they will not lose their house.

 

[Uncle Spielberg]

Just completed today on my first house! Managed to get on Britannia's SVR motgage at 90% before they pulled it and am now shitting myself that interest rates are going to start going up again!

Might be worth asking them if you can switch into a fixed rate at any stage.