The nervous wait to exchange....

[b0rn2sk8]

It really depends where you work, and if you are or need to play the long game or not.

It’s not uncommon for the London and non-London salary difference to be as little as 10% for the same job in the same organisation. But often there is a larger concentration of higher level jobs in London than outside and more opportunities to get one.

 

[Peerzy]

It's all relative but I think if you're looking at average house prices versus average salaries for the area then it is much harder in the south/south east. I think some towns like Oxford or Cambridge are well over 13x on those sort of scales, whereas London as a whole in more like 10-11x. That's just off the top of my head, and also pre-2020 so I'd imagine those commuter towns are even worse now what with everyone moving out of London (apparently)!

I see it as a bonus in some ways.... I'm in the SE and house prices are crazy. This means that in 20/30 years time when we retire we'll have the ability to easily move to anywhere in the UK (or probably abroad if we so wished) as we'll already own property in the most expensive part of the country. It's a harder slog whilst working but puts us in a much better position in the future.

If you live in Scunthorpe I'm sure you can buy a 3 bed detached house for £130k and live very happily, but you'll never be able to move out of the area without having to worry about finances or get some crazy pay rise.

In 20 years time I can leave Surrey for anywhere in the UK and know it'll be cheaper and we'll be fine.

 

[Scam]

(snip) In 20 years time I can leave Surrey for anywhere in the UK and know it'll be cheaper and we'll be fine.

Oh indeed. Totally agree. Whether or not house prices rise or fall across the board, the chances are the south east will remain more expensive for the foreseeable future. As someone who bought in London last year I'm very much of the same opinion as you. My other half is from Yorkshire and I know she has always wanted to retire back up there, for example.

That said, for comparison she knows friends that are high earners in Yorkshire and they have the quality of life, big houses, space etc. that we could only dream of right now. And they're already living it. That makes you wonder if it's all worth it in London but hey, those people are CEOs or other such business leaders/executives so they are clearly a level above us plebs anyway

 

[haz_pro]

Definitely two ways to look at it, and tomorrow is promised to no one.

I could have stayed in Surrey and bought a small 3 bed terraced ex-council house in a generic town. But after years of deliberating we decided to relocate and instead for the same price have a big detached 4 bed in a nice village surrounded by country side and beaches.

Will my house be worth the same as the 3 bed in Surrey in 20-30 years when I hope to retire - no. Will I be able to move wherever I want when I retire to release equity - also no. But I've no doubt I'll have had a much more enjoyable time with more space for my family, the potential for my children to actually afford a house too, and more disposable income along the way.

No right way to do it, but thankfully with remote working more people are in a position to make the choice, rather than be forced.

 

[dlockers]

House I wanted has gone for asking with a big cash deposit. Impossible to compete.

Got an offer on mine of 525k after a first viewing, I paid 450k 2.5 years ago. I've asked her for more as tbh I can wait longer for the right buyer as there is nothing on the market now.

Lady has gone to determine her best and final offer, will hear back Monday. Fingers crossed.

The house I offered £690k on may be back on the market come Monday. I'll offer £700k.

However I've upped the budget to £900k as a 4 bed has come on the market that looks like an old peoples home. I'll have to sell my beloved car to cover the stamp duty I think . Will take a look tomorrow and decide.

 

[dlockers]

Lady has gone to determine her best and final offer, will hear back Monday. Fingers crossed.

The house I offered £690k on may be back on the market come Monday. I'll offer £700k.

However I've upped the budget to £900k as a 4 bed has come on the market that looks like an old peoples home. I'll have to sell my beloved car to cover the stamp duty I think . Will take a look tomorrow and decide.

900k house has reduced height ceilings on the lower ground

Amazing place though. I think it'd be a shame if bought it as it really needs a 100-150k grand designs to make the most of it.

 

[Tee Hee Johnson]

Lady has gone to determine her best and final offer, will hear back Monday. Fingers crossed.

The house I offered £690k on may be back on the market come Monday. I'll offer £700k.

However I've upped the budget to £900k as a 4 bed has come on the market that looks like an old peoples home. I'll have to sell my beloved car to cover the stamp duty I think . Will take a look tomorrow and decide.

More to life than just a house.

 

[dlockers]

Guys,

Has anyone got any experience in revaluing a house to release equity? It came to me in a dream last night, but ideally what I would want to do is:

• Revalue this house at 550k
• Release the equity whilst maintaining 75% LTV (a doddle with 550k valuation)
• Become a hobbyist landlord that gets offended when tenants don't coordinate bin location by next type of pick up
• Buy new house with £100k deposit
• ...
• Profit?

 

[toshj]

Guys,

Has anyone got any experience in revaluing a house to release equity? It came to me in a dream last night, but ideally what I would want to do is:

• Revalue this house at 550k
• Release the equity whilst maintaining 75% LTV (a doddle with 550k valuation)
• Become a hobbyist landlord that gets offended when tenants don't coordinate bin location by next type of pick up
• Buy new house with £100k deposit
• ...
• Profit?

We did it. I would recommend leaving a bit of wiggle room in the LTV. We took out as much as we could from our flat in E1 in October 2019, to raise cash for the purchase of a new house. Ironically most of the money just went on paying the inflated stamp duty...

By the time our two year fix had come up for remortgage the value of the property had dropped to the extent that even in a market with favorable mortgage conditions - we managed to get a 5 year fix at .99% on our primary residence - we were only able to get a BTL mortgage that was materially worse than the previous one.

The drop in central London flats during the pandemic pushed us over into the 20% LTV bracket, down from 25%.

Anyone want to buy a flat in Whitechapel?? Please!

 

[dlockers]

We did it. I would recommend leaving a bit of wiggle room in the LTV. We took out as much as we could from our flat in E1 in October 2019, to raise cash for the purchase of a new house. Ironically most of the money just went on paying the inflated stamp duty...

By the time our two year fix had come up for remortgage the value of the property had dropped to the extent that even in a market with favorable mortgage conditions - we managed to get a 5 year fix at .99% on our primary residence - we were only able to get a BTL mortgage that was materially worse than the previous one.

The drop in central London flats during the pandemic pushed us over into the 20% LTV bracket, down from 25%.

Anyone want to buy a flat in Whitechapel?? Please!

Yeah stamp duty on a 700k place goes from 21 to 46 . Taking that from the equity I had released would put me into 2.34% fixed.

 

[shiver]

I was tempted to do the same, again with a flat in central London but in the end I sold other investments to make up the house deposit. Extra stamp duty is a stinger but it was offset by the main stamp duty holiday at the time. 1 year on and we’re hopefully not far from completion of sale of said flat, which will mean we’ll get that extra stamp duty back too.

If it was down to just me, I’d have probably stayed a landlord for a longer stint but the wife wanted less hassle and we still get a fair bit of capital back out of it

 

[dlockers]

I just spoke to Nationwide who said they've upped my valuation to £517k automatically anyway. That means I can pay the £11k ERC to end my deal 2 years early and then they'll put me on a 1.49% rate. Net saving is negative £7,245

 

[toshj]

Yeah stamp duty on a 700k place goes from 21 to 46 . Taking that from the equity I had released would put me into 2.34% fixed.

I should add that the BTL deal we're on is also interest-only as it was the only one we could get.

I'd much prefer a repayment one, but BTL and central London property have both been hit by the pandemic, giving us little room for manoeuvre. After service charge, ground rent and renting fees, we earn zero income on the property. So it's just sitting there, doing nothing.

We've also had to take the decision to keep the flat as a long term investment - selling it before March '22 would have seen our second home stamp duty refunded to us... a not so inconsiderable amount of cash despite us only buying a 3 bed terrace as our primary residence. It's pricey round here...

We've got reliable renters in the flat, one of whom is a family friend. We've just got to hope that the prices increase over the next X amount of years, and we're able to get onto a repayment scheme, for it all to be worth it.

I'd approach such an investment with great caution if I were you.

 

[dlockers]

I should add that the BTL deal we're on is also interest-only as it was the only one we could get.

I'd much prefer a repayment one, but BTL and central London property have both been hit by the pandemic, giving us little room for manoeuvre. After service charge, ground rent and renting fees, we earn zero income on the property. So it's just sitting there, doing nothing.

We've also had to take the decision to keep the flat as a long term investment - selling it before March '22 would have seen our second home stamp duty refunded to us... a not so inconsiderable amount of cash despite us only buying a 3 bed terrace as our primary residence. It's pricey round here...

We've got reliable renters in the flat, one of whom is a family friend. We've just got to hope that the prices increase over the next X amount of years, and we're able to get onto a repayment scheme, for it all to be worth it.

I'd approach such an investment with great caution if I were you.

Thanks, it is useful. Nothing is recession proof and I imagine a lot of BTL landlords forget to "cost up the risk".

The next gamble I have is whether porting my current mortgage at 2.34, ending in 26 months - is a risky gamble when it finishes in 2024. The cost to change is £7k, which is a pricey insurance policy.

 

[413x]

I'm seriously thinking about breaking my current mortgage fix a year early and fixing for 5.

If interest rates go up to even 1 percent (base rate) for any length of time it will be the sensible choice.
1 percent passed on to me is 100ppm


Toughy especially as I have to wait to march!

Anyone exited thier fix early?

Ltv is good too as house is estimated to have increased by 25 percent.

Probably one of the toughest financial decisions I've had to make.

 

[dlockers]

I'm seriously thinking about breaking my current mortgage fix a year early and fixing for 5.

If interest rates go up to even 1 percent (base rate) for any length of time it will be the sensible choice.
1 percent passed on to me is 100ppm


Toughy especially as I have to wait to march!

Anyone exited thier fix early?

Ltv is good too as house is estimated to have increased by 25 percent.

Probably one of the toughest financial decisions I've had to make.

Have you calculated your ERC? Mine is £11k and I save £150 for 26 months, so total saving is negative £7k. You are then gambling on interest rates in months 27 onwards being high enough for a period of 2 years(?) to re-coup value.

 

[413x]

Have you calculated your ERC? Mine is £11k and I save £150 for 26 months, so total saving is negative £7k. You are then gambling on interest rates in months 27 onwards being high enough for a period of 2 years(?) to re-coup value.

Yes. Erc is only 2k

Right now it's 4k (2 percent)
In March it drops to that 2k.

So payback is only 20 months at a rate 1pc higher than now.


It's exactly same Predicament I faced with electricity. I did fix in end. Even though many thought I was crazy.



Would I be more annoyed losing 2k and rates drop back in a year.
Or seeing rats hit 2pc and having to remortgage at who knows what rate.

If I had 2+ years left I'd stick it out. But 1? That's more difficult

 

[dlockers]

Basically then can someone look into their crystal ball for us

I can port £372k at 2.34%; fixed for 26 more months. New borrowing would be at 1.51-1.79%; fixed for five years.

The "cost" of me doing an ERC on the £372 is currently £11k. So the net-saving is rougly negative £3.2~£4.1k - or in other words, I can pay £4k now to "guarantee my rate" for roughly 36 more months than what I have them currently guaranteed at.

Alternatively I could port at 2.34, and fix my new mortgage for 2 years -> then gamble on what the world will look like in 2024.

Edit: Just realised my ERC drops to only £8k in 01/04/2022. So the negative benefit gap closes to ~negative £1k and positive £1k.

 

[413x]

Basically then can someone look into their crystal ball for us

I can port £372k at 2.34%; fixed for 26 more months. New borrowing would be at 1.51-1.79%; fixed for five years.

The "cost" of me doing an ERC on the £372 is currently £11k. So the net-saving is rougly negative £3.2~£4.1k - or in other words, I can pay £4k now to "guarantee my rate" for roughly 36 more months than what I have them currently guaranteed at.

Alternatively I could port at 2.34, and fix my new mortgage for 2 years -> then gamble on what the world will look like in 2024.

This would be great.
Would help me out a lot.

Thing that gets me is they won't want to raise it too much. As it will cause a financial crash. But also, can they even really choose not to?

I mean for me inflation isn't so much going to be controlled by base rate rises surely? Not in this case?

A lot is imported gas/food etc.
If people spend less on luxuries and even more on gas/food as a proportion.. Won't that increase inflation?

This is edge of my understanding of finance

 

[Peerzy]

Why not go onto a variable deal? People go onto a big long fixed deal for the security and stability and then halfway through try to justify paying thousands to exit it. Pick a variable deal and you never get into this situation.

I had 1 fix in my lifetime (first ever mortgage deal, 2 years and just to ease into home ownership). Ever since then I've always gone with the cheapest variable (normally with Nationwide). In that time I've see people take on 4, 5 and 10 year fixes and then pay thousands (and tens of thousands) when smallest personal circumstance changes, the bank doesn't do exactly what they expect or they just realise it's a rubbish way to tie yourself down.

The amount of posts in this thread alone that go along the lines of:

"I fixed for 10 years because it was an amazing great deal and now we're pregnant and I need to move and it's going to cost me £10k to exit as my new provider won't cover the new house what should I do but also how great was my fix because it saved me £11.62 a month."

etc...