House Buying Woes...:(

A £28k joint salary is FAR too low for a >£200k mortgage :eek:

That's over 7 times your joint salary!!

This could have gone very wrong for you - you've done the right thing for YOU, but pulling out will now cost the buyer potential Thousands of pounds...
 
Thanks melbourne, and to the other people for your feedback, positive or negative, although i'm not sure where people are seeing it as something for a "quick couple of grand" Like i said, i wasn't making this thread to talk about/mention amounts, thats not what this is about, we had planned to do it, with a LOT of research, but things do go wrong, and this did. We've actually been looking into other avenues and someone we know is looking to invest to help us out and get a proper buy to sell mortgage, of course, this news makes the seller say "Can i call you on Monday?" if we go through with it, it will work out, if we don't, we walk away and in the end, its not that big of a deal, there will always be others.

As said above, i know some people think it was just some flash of the pan "quick buck" idea, but thats not the case at all, we're looking to gather a portfolio of buy to let properties over time, and some to buy and sell on as well, but as this was our first one, it would have helped to finance the first buy to let, but as said, first time, is ALWAYS a learning curve, no matter how much research you do, there's nothing to prepare you for the reality of it!

At the end of the day, its still up in the air, things might happen, having an investor we know is a good thing to happen and allows us to not have to pay out on the deposit and pay minimum (1.5%) interest on the amount owed to him.

Make of it what you will, i know this kind of thing isn't for everyone, before i learnt more about it, i'll openly admit i spent 6 months telling my grilfriend to not even think about doing this as it was a stupid load of carp.

As said, if it works out, yay, if not and we don't get this place in the end, it happens, I can understand the vendor's POV being peeved about things, if she wants more time and decides to go for it, its all good, if not, then surely she'll be held accountable for the costs as she would be the one who pulled out (We are yet to, officially, as our solicitor is on holiday now!)

Edit: CI, saw your post, and yeah, i know it will cost them a huge amount if we pull out, but as said, it happens to hundreds of people every day, and why they moved out before the sale went through, totally baffles me.

As we don't have our own place right now, the payments would make a dent, but be managable, but time will tell on what happens.
 
Dont be suprised if the "advisor" slaps you with some kind of bill anyway for "services rendered"... if they do just inform them that you are aware that the very BAD advice they offered is something that you feel the regulator might like to hear about.

As for the people moving out before contracts were signed... well thats just their silly fault for jumping the gun. :rolleyes:
 
Slam62 said:
Please don't waste any more of those poor peoples time and money, leave them alone
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Sorry but if the sellers want to waste time and money by assuming things then thats their beef. Until contracts are signed then anything can and often does happen. They moved out assuming that the completion date was set in stone and that nothing could go wrong, either they were incredibly stupid or they had bad advice.
 
The way the system works, you have to spend money on solicitors/surveyours/searches on properties that you may not buy. You just have to take that into account when you budget as to whether or not you can afford it. And frankly those costs are small compared with stamp duty.

There does seem to be a backlash against property development, so maybe we should clear things up. Some people do need properties they can just move into, and are happy to pay for the privilege. Some people need flats/houses they can just rent and move into. And anyone who is buying and selling houses in addition to their primary residence is going to paying capital gains tax on the increase in value, stamp duty (if I'm not mistaken) as well as all the fees to the required professionals (bank, sol, suv).

Hardly easy money imho.
 
Im sorry to burst your bubble, but you've arrived to the 'property' game just as EVERYONE is about to jump, or is jumping ship..... this house sale falling through could very well be the best thing that will happen to you for a very long time financially.

there is NO money to be made in buy to let any more - NONE. If you bought a house years and years ago, maybe. But your looking to buy at a point where capital is DEPRECIATING (so no capital returns), and rents ARENT covering mortgages.

Plus, your trying to earn a living by profiteering over a persons need to put a roof over your head. Are you really happy with the idea that every house that a wannabe landlord buys, is one house LESS for anyone else to buy?

You are obviously very young and very new to this, and i suppose at the root of it all is someone trying to get ahead and make the best out of their life..... but the property industry which has suckered in tens of thousands of greedy individuals is just about to go pear shaped, and i hate to say it - but only MUGS are entering it now.

Just like everyone thought they could make a quick buck from the dotcom boom, a lot of people thought they could suddenly go from having nothing, to being a wealthy 'property developer' by getting a buy to let, then remortgaging on the equity to buy another.... etc etc.

Im coming across as a total know it all, but ill bet you in a few years time if you go ahead with this plan, you'll wish you'd not invested in property.

Best of luck.
 
brid said:
Plus, your trying to earn a living by profiteering over a persons need to put a roof over your head. Are you really happy with the idea that every house that a wannabe landlord buys, is one house LESS for anyone else to buy?
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Do you think that property development / being a landlord is immoral?
 
I dont think capitalism is immoral .... but i think in todays day and age, theres a point where you have to wonder if what your doing is ethical enough.

At the core of buy to let, is the idea that you can make money from someone needing a roof over their head..... Increasingly, the choice to rent is less of a choice than the 'only option' available to a lot of people. Just leaves a bit of a bad taste in my mouth, and even moreso since absolute amateurs are piling into it as a means to 'get ahead'
 
A joint income of £28k and you're wanting to build a "portfolio" of buy to lets, given the current housing market? I think you need to re-think your goals.
 
jamief said:
A joint income of £28k and you're wanting to build a "portfolio" of buy to lets, given the current housing market? I think you need to re-think your goals.
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exactly, and if he did manage buy this 'bargain' he would probably end up with several K of -tive eq. very quickly whilst not having the funds to service the loan, now that would be the time to buy his house from him.
 
I agree first time buyers are basically stuffed, just wish there was good quality housing for them to buy. The new housing there is feels like it has been fashioned from balsa wood!

Trouble is, a lot of people (certainly in the last few years) had looked at their finances and thought:-

1. Pension. Final Salary scheme has been stopped/didn't exist, and plenty of company schemes having trouble.
2. Stock Market. Not all that dependable growth, certainly not like it was.
3. Savings in bank. Naff rates in most places.
4. Property. All you hear on the news is the high demand and the short supply.

I wouldn't criticise the OP for trying to better himself, if he'd bought that house that would have been at least a couple of grand stamp duty for the state coffers (good for everyone, assuming it is spent wisely), potentially providing someone a home they can move into and reducing the likelyhood of the OP having to rely on the state at any point in the future.
 
melbourne720 said:
I agree first time buyers are basically stuffed, just wish there was good quality housing for them to buy. The new housing there is feels like it has been fashioned from balsa wood!

Trouble is, a lot of people (certainly in the last few years) had looked at their finances and thought:-

1. Pension. Final Salary scheme has been stopped/didn't exist, and plenty of company schemes having trouble.
2. Stock Market. Not all that dependable growth, certainly not like it was.
3. Savings in bank. Naff rates in most places.
4. Property. All you hear on the news is the high demand and the short supply.

I wouldn't criticise the OP for trying to better himself, if he'd bought that house that would have been at least a couple of grand stamp duty for the state coffers (good for everyone, assuming it is spent wisely), potentially providing someone a home they can move into and reducing the likelyhood of the OP having to rely on the state at any point in the future.
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Agree with some of what you've said - but "investing" in something like property with such a low joint income is nonsensical; a huge risk which you literally can't afford.
 
jamief said:
Agree with some of what you've said - but "investing" in something like property with such a low joint income is nonsensical; a huge risk which you literally can't afford.
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True, 7x your salary is pushing it. Certainly would be beans for tea every night and no going out till the house was sold.
 
.... if it sold.

.... And even more importantly, IF it sold for a profit.

At 14k a year, a small drop in market value could completely stuff him if he had to take out a personal loan to cover any negative equity on the sale. Has he factored in transaction costs, HIPS pack costs, Mortgage repayments? .....
 
Again, very true.

The market is interesting, the demand is still there for houses, just some flats are dropping in value like a stone. Places like Leeds have insane oversupply of flats.
 
I started to type out a reply and explain where you went wrong, the state of the market and the tax implications on a first home vs a second and intentions vs what you do but tbh if you're naive enough to have done what you have posted it's not worth the effort. All i'd say is good luck as buy to resell atm is a mugs game, anyone with sense has stopped purchasing or sold 12 months ago. A property would have to be well below market value and exceptional for anyone with any sense atm, that doesn't appear to be you.
 
funny that ... since i could easily buy a house, but choose not to ...... Ironically, it could be argued the OP couldnt either, since he's essentially on just ABOVE minimum wage but wants to buy a 200 grand house!
 
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