Can't be many areas where properties are valued 15% under 10 years ago, even though it was the previous market peak. The areas I'm looking to buy a £530k house 10 years ago would probably be on for at least £750k now and obviously in boom areas considerably higher.
I've noticed it in 2 areas nearby but i've not looked in others I imagine it's the same here, although I am up in the proper North (Scotland) where house prices are all over the place, trendy areas you can easily pay >£250K for a 1 bedroom flat and in other areas you can get a 2 bed flat for £15K, we even have flats up for sales for several million too just like London. The houses that seem to be losing money were brand new builds completely overpriced by the builder in small commuter towns. Must have been people not too clued up on the housing market or the areas tbh. I mean paying £530K for a house in this area would be madness regardless of the size of the plot/house. That kind of money gets you into the very best areas of Glasgow with the best schools and into decent sized 3-5 bed houses too. For example you can now get similar sized brand new build homes, slightly smaller maybe with slightly smaller driveways and gardens in a much better area for less than £400K. It's madness people paid over say £300K for this area as it's not worth it but to spend £530K+ you would have to be ignorant. No wonder houses aren't shifting 9 years later at a heavily reduced price, they simply aren't worth it and won't be for about another 30 years I imagine.
Say you took out a 25 year mortgage on a £530K property. You would end up paying about £300K in interest so for it to drop in value too by £100K that's £400K out of pocket. I don't know what people were thinking paying west end prices in a fairly new small commuter town. It doesn't have a train station, no schools, etc. Like I say the most I would pay in this area is £300K and only if it was a 5 bed with a double garage. £400K gets me a 5 bed with double garage in a very good area with one of the top schools in the country.
This is why it's important you do your research when buying. Make sure you know the areas well. You want to buy in an established area that people want to move to for schools or buy cheap. Don't pay stupid money for big houses in mediocre areas. When it's only a few quid more for the same house in a well known established area with a great rep.
I'd much rather be paid off quicker and borrow less but if we don't accept the max offer, we'd only be able to afford a grotty flat, after 7 years of living in another flat, neither of us wanted that. Also my other half would have a breakdown if she has to stay any longer with my parents
I'd rather have half decent sums of disposable cash than live in a bigger/better property with no money what so ever. It allows you to go on holidays, treat yourselves, buy better cars, etc. Ideally whatever your mortgage is you want the same amount of cash as disposable income after all household bills are paid IMO.
Say your mortgage is £1K rest of household bills £500. I'd say you would want another £1K to be free for food, (So £2500 per month in income after all deductions for this scenario) clothes, entertainment and luxuries, overstretching and leaving money tight means sacrifices and and the more stretching the more sacrifices you need to make. You will be living to work rather than working to live. That way if you can budget and if there is money left over save for things or overpay your mortgage.
You may think living with your parents currently is hell, but if you overstretch too much then it will be hell trying to do anything other than afford to run a house, taking out loans for car repairs, etc. It's about finding the right balance. No point working your socks off everyday so in 30 years time you can then start enjoying what is left of your very small life.
Find the balance, don't swing too much in 1 direction. If you are overstretching make sure you do have enough cash left over to enjoy your life.
