House Buying - Advice?

[Jameshow]

The most important thing about your pile of bricks is that it is your home, think like that and it's value is irrelevant and so get on and enjoy living there. Given my time again and if I was late twenties / early thirties now I would without hesitation be getting out of England, it is just becoming an over crowded over developed sespit, only those of a certain age can appreciate how nice it was.

Or it's move to somewhere like Northumberland, mid Wales or North Devon to a quieter way of life

Cheers James

 

[johnny]

I feel that the belief that money is wasted on rent isn't especially valid. While I don't rent myself, but have done on occasions, a mortgage isn't the holy grail that many people think it is.


I'm not saying that anybody should rent forever, quite the opposite, but rental money, in my opinion, isn't burning money in the way that many people think it is.

I couldn't agree more . I have rented property for most of my working life and the major benefit for me was that I could afford to rent large houses and flats with plenty of rooms and space in great locations which I could not have afforded had I bought something on a mortgage.

shortly after leaving UNI In 1988 I was offered to buy the property I was renting at that time ,a GF flat in a tiny old cottage containing a 1x bed flat on each floor . I was offered £7500.00 cash to buy so I jumped at the chance to get on the property ladder and at last gain some security of tenure.

The flats were tiny with a small courtyard ,in desperate need of modernisation and located on a busy hill in a small Somerset Village . I repaired and upgraded them and eventually sold them making a small profit . The five years I lived there were truly miserable . Small windows, no storage space, no garden, no outlook, and dark inside all year round. A typical 100 year old workers cottage.

Having learnt my lesson in 1999 I looked for a more suitable property to rent and found a huge end of terrace 4x bed cottage with huge garden in a private secluded lane at £465.00 month rent.. It was heaven. I ran my Business there with an office and electronics workshop and My partner and myself lived there for 13 years and in all that time the rent stayed at £465 per cal month. ! The Landlord refused to sell us the property but I have calculated that taking into account the increase in equity and the huge mortgage it would have required I have still been better off financially and lived in a great property in a fabulous location for a peppercorn monthly rent instead of a huge monthly mortgage .

Due to an inheritance in 2012 we purchased the adjacent property and are enjoying our retirement in security with no mortgage or rent to pay.
I know that I have been very fortunate but my experience is that life is not about saddling yourself with a huge mortgage and other large loans ..... its about quality of life however you can achieve that

 

[Ollie78]

A house is still always worth a house.
The market goes up and down together in general. I could sell my house for loads more than we payed but will still need to buy another one. Treat it as a home not an investment.
Don't be scared of work, better to buy something older and properly built than some new estate type house by a big builder.

Ollie

 

[ian33a]

Indeed Ollie, and I've often said to people, you only realise the financial value of a house if you plan to sell it and live in a cave or if you are forced into a care home.

We are in the process of passively looking as we may move next year - various windfalls allowing us to move somewhere which offers better value. If we do move it will be to something that allows us to exploit our hobbies and interests better, now that we are retired. In that regard, a move is for enjoyment and adventure and not purely for financial investment.

I also agree with your sentiment about new builds. Small, quality builders aside, the big companies are throwing up shoe boxes with handkerchief sized gardens and no privacy and charging a premium for doing so. Older stuff has more character and space around it.

 

[Spectric]

I feel that the belief that money is wasted on rent isn't especially valid. While I don't rent myself, but have done on occasions, a mortgage isn't the holy grail that many people think it is.

We have been brought up in this country to believe it is, drumed into us that bricks are a good investment to sell the ideal yet it is a very good means to ensure people support the economy by knowing their home is at risk if you don't pay the debt. You go through education to start a career which funds both the government and your lifestyle, you get a wife, start a family and buy a home, work until old age then retire. Now if you are unlucky and need support they use the money tied up in your house to pay the cost of care until there is little left when it get's paid for you.

So renting does sound like you are just spending money but you do have a home, your rent is less than an average mortgage and you do not have to worry about major repairs. You also have more freedom to just move elsewhere without the hassle of buying and selling property. Ok so with a mortgage it does get cheaper towards the end of the term but even when you own the property the capital is tied up, you could sell up and rent or move into a residual lodge(caravan) or join the other brits abroad like that lot in sado park in spain. The other option is to get fleeced and go for a capital release scheme, whatever you choose you still need a home.

So what is the best option, rent or buy? There is no answer that is right for all, you decide and live with the decision, but a mortgage is not the must have option. Renting is more popular in europe but they probably have more controls in place, buying is a big commitment, my opinion is that you need to base it on how much of your income will be consumed by your mortgage for the next fifteen years, and how much impact this will have on what you expect from life. These days mortgages are consuming a high percentage of income, once upon a time the man of the house could support everything but now you need more than an average wage. My mortgage was about 5% of my annual income so not an issue, now some are needing more than 30% of their total joint income, must impact their lives. I personally would not buy a property under the current enviroment, to much outlay and harder to earn good money these days so to much impact, as I have said emigration is a good option for youngsters with ambition or rent a property until a property crash which will happen, too many properties are becomming out of reach for mew buyers.

 

[Phil Pascoe]

Renting is all very well but why anyone would want to be paying rent when they retire is beyond me.

I was thinking to emigrate in the mid '80s but plans went belly up. My sister's a Kiwi, having been there since 1987, and has done very nicely - they have two houses, one about £1,300,000 and the other about £500,000 - both will be sold when they retire and they'll downsize and have a nice pension.

I remember my grandmother going nuts when her rent increased to £2 7s 6d a week. (£2.37 1/2p for you callow youths.)

 

[baldkev]

your rent is less than an average mortgage

Not around here.... its always been more than a mortgage, which is crazy ( for the renter) because if you can afford to rent, the bank should give you a mortgage, but no, it doesn't work like that!

I don't think pandemic prices will go back down, certainly not here. It sometimes stalls, but doesn't drop.

I am definitely on the hamster wheel, got to work to pay for everything and you cant stop! Kids, wife, mortgage, lots of tools and other things to go wrong and fix.
What else is there? You can't just go live on a piece of woodland, the local council come after you and its a real fight ( a friend of mine has done this )

Lots of great comments above for the pro and con of it all, but I would buy somewhere if you can

 

[Spectric]

Ah yes Devon, second home hotspot which is totally unfair on locals. Up here a couple were evicted because their rent was about £450 a month, as a holiday let the greedy landlord could get £800 a week, hope the taxman takes a good lump.

I was lucky in that I brought in the south and then sold to escape the rat race being created by over development and moved north, a one way trip but up here people live, down south most just survive. Also earning good money in the nineties, more than I could earn now even down south because a lot of the work went abroad but were easy times. Now if faced wth what many are facing it would be a dilema, wages have not kept pace with property prices and the gap is much larger now so I would really struggle yet people are living on just £30K or less.

 

[Phil Pascoe]

people are living on just £30K or less.

£30,000 for many in Cornwall is the stuff of dreams.

 

[baldkev]

Yarp
Imagine being a young couple both working at tescos or something. You just don't have a chance at getting a house unless someone helps you ( family )
We wanted to move pre pandemic, no chance now so we are probably going to do a loft conversion subject to planning etc..... its an AONB so a bit more complex
Mind you, how lucky are we? At least we didn't get born in Afghanistan

 

[Glitch]

We need to build 'council houses'
Not through housing associations disguised as charities.

Today's social housing is hardly affordable on the average wage. Often needs two wage earners.

So glad my Mum and Dad didn't take up right to buy. I could have bought it for them (or really for us kids)
Mum now has a nice council retirement bungalow for her final years and no property or care home cost worries.

Father in law had to buy the council flat (now housing association) he has lived in since 1966 because he couldn't afford the rent on his basic pension. It cost peanuts but he has paid out £thousands for repairs to the block and faced with many thousands more for fire safety improvements and cladding issues. The flat cannot be sold. He is 91 and the equity in the unsaleable flat might have to be used for his final years care costs if we can't persuade him to move in with us.

We need to provide affordable secure housing for those that need it. Right to buy is a failure in my opinion.
Let those that can afford it buy property.
Short term lets on the private market. Long term security through councils, just like the old days.

A proper house building program can create jobs and training opportunities. Build for quality not profit.

 

[baldkev]

A proper house building program can create jobs and training opportunities. Build for quality not profit.

Many years ago I thought it would be a good idea to set up a building scheme for affordable housing. The basic premise is that you have a core of well trained personelle that oversee the crews and help with training. The scheme would take on apprentices, mostly young or homeless, to train them up and give them a shot at life. On site accommodation can easily be sorted for the homeless while the works are ongoing.


As for right to buy, my in laws bought theirs and still live there, it gave them a massive leg up and they had 4 kids, so it definitely helped them
There are a ton of issues with the idea, like people stealing materials etc, but there is with big building firms anyway.

 

[Phil Pascoe]

.
Let those that can afford it buy property.

Yes. And means test everyone in social housing - if they can afford to buy, they can afford a free market rent.

The right to buy wasn't a bad idea per se, the bad idea was not reinvesting the money and building more.

 

[Terry - Somerset]

Some of these comments are quite polarised - individual experiences vary widely:

• The cost of renting is not dissimilar to purchase - a typical rental yield is ~5% gross from which the landlord needs to deduct service charges, maintenance costs, insurance etc. Current long term fixed rate mortgage (10 years) is ~4%.
• The impact over time on mortgage rates, property values, rental costs may be speculation, but historically house price changes increase the owners equity, rental costs typically increase to reflect property values.
• Moving house is a significant cost - not just the obvious costs of stamp duty, estate agent, legal, removals, but (likely) carpets, curtains, decorations, structural etc. Rental may be best whilst young if there is an expectation of moving for career development.
• A personal view - long term ownership is the preferred model - simplistically mortgages can be repaid, rent continues until we shuffle off the mortal coil!
• Affordability of property varies widely across the country. Regional income levels also vary. We should be wary of making generalisations based on personal circumstances which are inherently individual (I may also be guilty of this).
• We are becoming a property polarised society. Those who inherit from property owning parents are likely to become far wealthier than those who inherit from renters.
• This may be a key driver of buy to let in recent years. Often the inheritance comes at an age where the need is to reinforce pension provision (BTL) or repay outstanding mortages, not meet an immediate financial need.

 

[J-G]

The right to buy wasn't a bad idea per se, the bad idea was not reinvesting the money and building more.

Absolutely!!

That's one of the few things that Maggie got wrong

It's not that councils didn't re-build - they were not allowed to use the funds created to do so !

 

[Phil Pascoe]

I've always thought the lack of means testing unfair - I know a chap quite well who earned between three and four times what I earned whose rent I effectively spent decades subsidising. I don't think that is the way the system should be designed to work.

 

[Lonsdale73]

I've always thought the lack of means testing unfair - I know a chap quite well who earned between three and four times what I earned whose rent I effectively spent decades subsidising. I don't think that is the way the system should be designed to work.

If he was earning three or four times your earnings and therefore presumably not on benefits, then how were you subsidising his rent?

 

[RobinBHM]

Most articles online are failing to give decent advice. I'm aware that's because they don't know what's going to happen. I'm wondering if anyone here has bought anything since the price rise and/or has experience of buying and selling in general

my advice is that there are now 2 stages of price negotiations: at offer and following survey

surveys are now used as leverage -and around loads of house purchases fall through following survey and or the price gets dropped.

house prices wont fall -unless there is a major economic crash, which is unlikely.....unless we are all dead from covid

 

[Phil Pascoe]

Lonsdale73 ^^^ Because I was paying taxes, he was getting a cheap house, subsidised by the tax payers..

 

[Phil Pascoe]

surveys are now used as leverage -and around loads of house purchases fall through following survey and or the price gets dropped.

A problem buyers and lenders are having (especially in areas like Cornwall where the prices are escalating by the minute is that people are agreeing to buy then the surveyors are valuing the property (even if near perfect) at way under the asking price.