The nervous wait to exchange....
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Soldato
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That's what help to buy is for...
No it's not, it's designed to fund a large amount of the deposit which people aren't able to save easily, it's not designed not allow you to buy something you can't afford.
Soldato
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While I appreciate that's not what it's designed to do, it does enable that. It would enable me to buy 80% of a property and then, when our mortgage potential has increase, buy the other 20%. There's little to no financial penalty for doing so. If you live in an area where the price of houses is exceptionally high, it might be the only chance you have to climb the ladder.
We have a £120k deposit and earn a decent amount, so potential house value without is about £450k. Surely we should be able to afford a decent 3 bed home?
Having just bought a £575k 3 bedroom house in the South East, I can't argue against wanting a nice house. However, we had more value in our previous home, so our mortgage is less than what we could have afforded if we went all in.
I think the last 12 months may have skewed people's priorities. As nice as it is to have a lovely home, you want to have a bit of money left over to live a little.
I think the last 12 months may have skewed people's priorities. As nice as it is to have a lovely home, you want to have a bit of money left over to live a little.
To be fair i guess it depends on career trajectory, outgoings and what you want. I know I'm guilty of going for my max affordability (and almost more). Over a 35 year mortgage it is affordable, plus I'll be able to overpay it such that its done in 25 years. The mortgage plus overpayments would be circa 30% of our combined net income.
Thats assuming we can find a buyer for our current house for the third time...(!)
Blimey, and there is my friend, buying a small 2 bed terrace in South Wales for £78k! It needs renovating to some extent. Maybe £20k spent on it....no mortgage too. Plus, he is on naff wages. Nothing borrowed. All out of his own pocket. From savings. Life savings at that.
Soldato
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That’s just how it is here. The fact is I could afford the repayments on a £515k house, and would rather spend my money on that than saving it.
I look at our house as an investment in the future. The new mortgage is £1000 a month more than the last one. However that £1000 is going into an investment that will increase in value, instead of being spent on things that will decrease in value, or sitting in an account that gains 0.1% pa interest.
Some people buy GPU's. I figured property would be a bit more reliable.
Some people buy GPU's. I figured property would be a bit more reliable.
Soldato
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I look at our house as an investment in the future. The new mortgage is £1000 a month more than the last one. However that £1000 is going into an investment that will increase in value, instead of being spent on things that will decrease in value, or sitting in an account that gains 0.1% pa interest.
Some people buy GPU's. I figured property would be a bit more reliable.
Exactly, so do I. I wouldn't be able to consistently save anywhere near what I put into the mortgage without taking bites out of it all the time.
I look at our house as an investment in the future. The new mortgage is £1000 a month more than the last one. However that £1000 is going into an investment that will increase in value, instead of being spent on things that will decrease in value, or sitting in an account that gains 0.1% pa interest.
Some people buy GPU's. I figured property would be a bit more reliable.
To be fair, a lot of your payments will be to interest?
I know for the mortgage I'm taking out, just shy of 400k at 1.7% the interest is around 7k a year.
I agree with the overall sentiment but I want to pay more to live in the house, not as an investment vehicle (as I can't see myself wanting to significantly downsize/ go to a worse area later)
Soldato
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People maxing out what they can afford with a maximum help to buy loan based on future expected career prospects and life situations gets a big yikes from me. What's the plan if your pay/property doesn't increase enough to let you remortgage out the 20% equity loan when it's up for repayment? Because if you can't you'll be stuck with the bottom barrel mortgage products and/or additional payments to HTB.
Some of it - however that's offset by the increase in value in the house. So, I am gambling on house prices increasing at more than 1.7% a year - on average, over the the next 25 years.
Nothing is guaranteed in life, but as gambles go - I think it's a pretty safe bet. And if I'm wrong, I got to live in a nice house regardless.
Agreed that you shouldn't over extend yourself on too much of a gamble but you're also hopefully investing in a quality of life improvement that you experience immediately. Different game if you're investing in "other" property with that gamble on increased value of course.
So far we've got pretty lucky. We agreed our sale / purchase before the stamp duty announcement - so mid way through all of that found that we'd be £15k better off than what we'd expected. So we're using that money on home improvements.
Since we moved in a few months ago I've converted this.
Into this - so hopefully working in the right direction.
Since we moved in a few months ago I've converted this.
Into this - so hopefully working in the right direction.
Very nice job indeed. We have a bathroom we intend to do up in the new place and cannot wait to get started. Also a bunch of sash windows that will need replacing sometime but we're looking forward to it!
Did you do the work yourself?
Bought mine before the pandemic with a 85 percent ltv.
It's affordable but it's quite near max for what a Bank will loan. They questioned for example if my living expenses were as low as I said.
Let's say this is the top. Of the market at least for a while.
It really wouldn't take much to tip. Into negative. With a 5-10 percent bought a month a go, it's a risk. Can see why banks withdrew high (90+) ltvs.
Obviously you never know what's around the corner . But with covid and the artificial spike caused by the stamp duty relief it makes it a risky time for a first time buyer.
So far we've got pretty lucky. We agreed our sale / purchase before the stamp duty announcement - so mid way through all of that found that we'd be £15k better off than what we'd expected. So we're using that money on home improvements.
Since we moved in a few months ago I've converted this.
Into this - so hopefully working in the right direction.
Looks amazing.