The nervous wait to exchange....

[Delvis]

Went all in. All my savings (bar 2k) on first home. Was 260k maxed out mortgage but 85ltv. Wondering '**** is this a massive mistake?'

Fast forward and house is up 30k. Crazy. Disgusting really. I'd never have imagined this. In my head flat was my optimistic thought for a year.
And I genuinely think of natural causes played out flat would be kind of a best case.

But tories and house prices.. Didn't even think they'd prop it up like they did. I still think stamp duty break was a travesty for FTBs trying to get a house.

Travesty? An I misunderstanding the last part? Far as I'm aware it saved me money? (Apparently)

 

[413x]

Travesty? An I misunderstanding the last part? Far as I'm aware it saved me money? (Apparently)

If it saved you money you're not the typical FTB. The 250k was a 0 rate for FTBs anyway. Which out of London is pretty decent for most first houses. So if your house was over that you're more likely an outlier.

Also even if you were over that..
Consider the average house went up 10 percent. If you bought at the start. You'd have saved maybe. But anywhere near the middle or end you may have zero stamp. But if that house is now 275 rather than 250 you have actually lost.

Obviously not sure how much the stamp duty contributed to these rises. But I suspect it was more than the saving.

 

[mikehhhhhhh]

That’s sort of irrelevant because you could have always been able to do that via mortgage borrowing. If you can afford to pay the higher price due to stamp duty relief, under the pre-pandemic scenario, you could have afforded to borrow more to cover the stamp duty.

Not stoking the housing market would have just been cheaper because you are just spending less money period. It’s also a pretty regressive tax policy because it’s benefits those with higher incomes.

The increase in house price is also only ever relevant if you want to downsize to make future substantial borrowings against it.

I'm not sure I agree. Assuming house prices don't fall again, that extra money is now equity in the property, instead of in HMRC's coffers.

Sure, you only realise that if you move somewhere cheaper or die, but you'd have to still consider equity preferable to tax.

Also, assuming you're a first time buyer with a modest deposit, it's not as simple as just borrowing more to cover your SDLT liability.

That said, through a little bit of luck and a lot of cheek I think I got my place for near pre-covid money as based on the similar house that just sold on the close and Zoopla, it's worth over 10% more than I paid just five months ago.

 

[koolpc]

I wonder if prices will drop next year?

 

[b0rn2sk8]

I wonder if prices will drop next year?

Doubt it, the vast majority of people impacted by COVID are not those buying houses. Hence why in retrospect applying the normal recession stimulus to the housing market was not the best idea.

The BoE is projecting that they will increase interest rates in the medium term, that’s not typically associated with expecting house prices which is normally tied to a recession.

@mikehhhhhhh equity is only useful if your actually going to use it. There is little point of having equity locked up in your house when you could have used that money for other things. It’s also not equity of you owe it to the bank, you still have to pay that extra cost. You’ve just got a bigger mortgage with higher monthly repayments for longer than you otherwise would have had. Or you have a smaller house because you can no longer afford what you could previously.

 

[mikehhhhhhh]

@mikehhhhhhh equity is only useful if your actually going to use it. There is little point of having equity locked up in your house when you could have used that money for other things. It’s also not equity of you owe it to the bank, you still have to pay that extra cost. You’ve just got a bigger mortgage with higher monthly repayments for longer than you otherwise would have had. Or you have a smaller house because you can no longer afford what you could previously.

I get what you're saying, but surely you can't say you'd rather pay £10k in tax than an extra £10k for your house, surely?

At least in the latter case you can get that £10k (and them some) back some day.

At worse, it's a little extra inheritance for your kids.

 

[Delvis]

If it saved you money you're not the typical FTB. The 250k was a 0 rate for FTBs anyway. Which out of London is pretty decent for most first houses. So if your house was over that you're more likely an outlier.

Also even if you were over that..
Consider the average house went up 10 percent. If you bought at the start. You'd have saved maybe. But anywhere near the middle or end you may have zero stamp. But if that house is now 275 rather than 250 you have actually lost.

Obviously not sure how much the stamp duty contributed to these rises. But I suspect it was more than the saving.

So you're calling me a liar? Or have I misread that You've confused me.

We didn't pay stamp duty, the house was 277k and I don't live in London.

250k where I live wouldn't get you much.

And typical first time buyer? The hell does that even mean? I bought my first house, therefore I'm a first time buyer.

 

[b0rn2sk8]

I get what you're saying, but surely you can't say you'd rather pay £10k in tax than an extra £10k for your house, surely?

At least in the latter case you can get that £10k (and them some) back some day.

At worse, it's a little extra inheritance for your kids.

While true, your numbers just don’t stack up. The reality of it is that house prices went up 10% and the stamp duty saving was significantly less. That’s £25k on what was a £250k house, stamp duty would have been £2,500.

If I had the choice of paying £250k and £2.5k in tax or £275k plus compound interest on £22.5k for 25+ years, I know which I’d choose.

Like I and others said, if you had a sale agreed pre-lockdown and managed to get it though, happy days. In reality everyone who came after it was an utter disaster.

Even worse now it’s ended, people are paying those inflated prices with zero relief and there isn’t really any prospect of prices falling back.

That’s why I said in retrospect it probably wasn’t the best idea but in reality, at the time, no one really had a clue what would happen. Just look at the car industry, they stoped production, cancelled all their component orders and now there is a huge new car shortage because they don’t have the components.

 

[413x]

So you're calling me a liar? Or have I misread that You've confused me.

We didn't pay stamp duty, the house was 277k and I don't live in London.

250k where I live wouldn't get you much.

And typical first time buyer? The hell does that even mean? I bought my first house, therefore I'm a first time buyer.

So I fail to see how this saved you money.
The stamp duty On 277 would be what? 1k

That house probably would have been 250 before the pandemic hit.

So you bought a house for 277 rather than 250. So no, I can't see how it saved you money.


Just had a look. Apparently there's no stamp duty up to 300k for first time buyers? So you definitely didn't save anything with the stamp duty break

 

[mikehhhhhhh]

While true, your numbers just don’t stack up. The reality of it is that house prices went up 10% and the stamp duty saving was significantly less. That’s £25k on what was a £250k house, stamp duty would have been £2,500.

If I had the choice of paying £250k and £2.5k in tax or £275k plus compound interest on £22.5k for 25+ years, I know which I’d choose.

Like I and others said, if you had a sale agreed pre-lockdown and managed to get it though, happy days. In reality everyone who came after it was an utter disaster.

Even worse now it’s ended, people are paying those inflated prices with zero relief and there isn’t really any prospect of prices falling back.

That’s why I said in retrospect it probably wasn’t the best idea but in reality, at the time, no one really had a clue what would happen. Just look at the car industry, they stoped production, cancelled all their component orders and now there is a huge new car shortage because they don’t have the components.

Yeah, you're right. I guess it depends on cirsumstances. It certainly helps more, the more you're spending.

For me, it was very useful, but I was lucky enough to dodge most of that price rise I suppose.

 

[Peerzy]

Tried meeting in the middle but the vendor purchased her next home based on our original offer so, was reluctant to lower the price. Paid £10,000 over in the end.

Shame, at least you got a bit off. I suspect if you really push for it (ready to pull out, can't afford it etc...) they'll find the money / ask the party further up the chain to cut in on the loss etc..... Understand it's not that easy with an emotional decision though.

That's not really the case thought is it? The price is worth however much someone wants to pay for it. If the bank only wants to pay XXX amount for it, that's fine but someone else (or even another bank) might deem it worth that £15k higher.

2 banks have under valued it, this means realistically anyone making an offer on the property at the same price Lonewolf has agreed will need to fund the last £10k / £15k themselves. This would instantly rule out a lot of people and make it harder for people obtaining a mortgage to buy the property. If Lonewolf pulls out the vendor would likely need to accept a lower offer from someone else to avoid the same problem happening again.

Remember, someone might want to pay £15k over for a house because an EA has played them (magic mystery buyer anyone) or any number of other reasons that have left the price inflated.

People often get annoyed at a bank doing this but in reality it's a good thing, the bank are protecting themselves and also the purchaser. It's about the strongest possible negotiating hand you can be given to get the money off (or a portion).

 

[a1ex2001]

Had a slightly bonkers offer accepted on a one off property, just waiting on mortgage companies and getting my head round our family home being rented out (only way to get to the front of the no chain gang) the debt is slightly epic but the net payment is affordable. Needs a little work though! (It’s a wreck and we will have to live in it while renovating).

 

[koolpc]

The stress and anxiety of buying etc can be difficult. I suffer from anxiety and just had an offer accepted on a house i saw and survey booked for next thurs.

Already i am a wreak. It affects my health.

Luckily in a position where i dont need a mortgage. House prices have shot up a fair bit and houses are snapped up within days!

With this one, there was 3 or 4 of us with offers on it. We all had to give our best offer. My offer was £1k over asking.

 

[koolpc]

Interesting article on house price rise:

https://www.bbc.co.uk/news/business-58274811

 

[montymint]

The stress and anxiety of buying etc can be difficult. I suffer from anxiety and just had an offer accepted on a house i saw and survey booked for next thurs.

Already i am a wreak. It affects my health.

Luckily in a position where i dont need a mortgage. House prices have shot up a fair bit and houses are snapped up within days!

With this one, there was 3 or 4 of us with offers on it. We all had to give our best offer. My offer was £1k over asking.

I know how you feel re: anxiety - I take beta blockers just to stop my HR racing when stressed and my partner has clinical depression - I've been going through the process now coming up 16 weeks.

This can't end quick enough!

 

[koolpc]

I know how you feel re: anxiety - I take beta blockers just to stop my HR racing when stressed and my partner has clinical depression - I've been going through the process now coming up 16 weeks.

This can't end quick enough!

Hope it all goes ok for you. I been on meds 17 years for anxiety / depression. Stress makes it really flare up. And going through the process of buying a house is extremely stressful as we all know.

 

[a1ex2001]

Shame, at least you got a bit off. I suspect if you really push for it (ready to pull out, can't afford it etc...) they'll find the money / ask the party further up the chain to cut in on the loss etc..... Understand it's not that easy with an emotional decision though.



2 banks have under valued it, this means realistically anyone making an offer on the property at the same price Lonewolf has agreed will need to fund the last £10k / £15k themselves. This would instantly rule out a lot of people and make it harder for people obtaining a mortgage to buy the property. If Lonewolf pulls out the vendor would likely need to accept a lower offer from someone else to avoid the same problem happening again.

Remember, someone might want to pay £15k over for a house because an EA has played them (magic mystery buyer anyone) or any number of other reasons that have left the price inflated.

People often get annoyed at a bank doing this but in reality it's a good thing, the bank are protecting themselves and also the purchaser. It's about the strongest possible negotiating hand you can be given to get the money off (or a portion).

If only this were true often the banks valuations have no basis in reality and are performed by people looking on Rightmove and doing a drive by! They seem incapable of taking into account recent market fluctuations only reacting to price rises months after they are a fact and making genuinely weird decisions. The only thing the bank should be doing is assessing if the sale of the property at auction would cover the banks risk which lets be honest is certainly the case for anyone taking a 70% mortgage on a property not in the ghetto!

 

[montymint]

Hope it all goes ok for you. I been on meds 17 years for anxiety / depression. Stress makes it really flare up. And going through the process of buying a house is extremely stressful as we all know.

It's looking like we should wrap up legal work in the next few days - my buyer is confident in the underwriting (he's provided everything they've kept asking for) going through so if all goes well I hope to move before the Sept 30th deadline for stamp duty. Anything before that IMO is a bonus - I've been really chilled for packing, but the big cleaning jobs are done (loft and garage are both empty now) and have decent quotes for the removal (£540 all in).

 

[Skillmister]

Are you allowed to do the conveyancing on your own purchases out of interest?

To be honest I don't know if there is a rule against it. I did the majority of my own purchase but it was done in my supervisors name. That was at a small company though. My current employer wouldn't allow it

 

[b0rn2sk8]

I don’t think there is anything stopping you doing your own conveyancing but if you have a mortgage, they’ll instruct a solicitor to do their element which normally your solicitor would do on their behalf.

It also assumes you know what you are doing and given how little it actually costs, it’s really not worth it. A big chunk of the fees you’ll end up paying anyway for surveys, searches etc.

You may get a few raised eyebrows from others in the chain too and they may not deal with you without a solicitor onboard. I’d certainly be asking questions about it.