House Prices #3 Property market, buying and selling

[jaymie]

Not sure if this is a silly question but I can’t seem to find a straight answer online. Also apologies if something similar has already been asked, I haven’t had the chance to read all the threads yet.

I bought my first flat 3 years ago and am looking to sell and move once my 5 year fixed mortgage is up. Do you need a deposit when buying another property? Or are deposits usually just for first time buyers?

I have an idea of how much I’ll need to put aside for estate agent and solicitor fees etc but now I’m wondering if I should save a deposit too. I won’t have a massive amount of equity in my current property and obviously can’t rely on it selling for much of a profit due to current climate. I also don’t earn a huge amount of money so need to budget quite tightly for putting money away into savings so like to have an idea of how much I need for certain things.

I’m in Scotland if that makes any difference to anything.

So let’s say you bought your place for 500k and sell it for 600k. You have a margin of 100k. But if you didn’t save any deposit at all, then you will use the 100k to pay your solicitor fee, stamp duty, estate agent blah blah. And the remaining is yours to be put towards your new place.

You usually put down a deposit of 10%

 

[xbxbx]

So let’s say you bought your place for 500k and sell it for 600k. You have a margin of 100k. But if you didn’t save any deposit at all, then you will use the 100k to pay your solicitor fee, stamp duty, estate agent blah blah. And the remaining is yours to be put towards your new place.

You usually put down a deposit of 10%

Thank you, this is very helpful.

Although I’m working with much smaller numbers, bought my flat for 80k and my budget for the next place will be 110k-120k. Flats in my direct area go between 75k-90k so I’m keeping my fingers crossed I can get close to the 90k mark, but we’ll see.

 

[SpindleWhorl]

Thank you, this is very helpful.

Although I’m working with much smaller numbers, bought my flat for 80k and my budget for the next place will be 110k-120k. Flats in my direct area go between 75k-90k so I’m keeping my fingers crossed I can get close to the 90k mark, but we’ll see.

Depends how much you owe on the mortgage

 

[epl000]

Thank you, this is very helpful.

Although I’m working with much smaller numbers, bought my flat for 80k and my budget for the next place will be 110k-120k. Flats in my direct area go between 75k-90k so I’m keeping my fingers crossed I can get close to the 90k mark, but we’ll see.

So your 'deposit' for the next place, assuming you sell your current property, will be what you sell your property for, minus what you owe on your current mortgage at that point in time. So say you bought it for 80k, and put down a 10k deposit, you'd have had a 70k mortgage. Then over the 5 years you owned it you will have started to pay off some of that 70k (as well as some interest) so you may only owe 50k say. So if you sold for 90k, then you'd have 40k 'deposit' minus fees stamp duty etc. Obviously very crude but hopefully you will be able to work it out from your actual circumstances.

 

[Yel]

It's a sea of reduced here in the SE.

Although noticing some re-listing at an inflated price. Presumably to then accept a lower offer and pretend the buyer is getting value . Very DFS last day of the sale

 

[Folkevermore]

It's a sea of reduced here in the SE.

Although noticing some re-listing at an inflated price. Presumably to then accept a lower offer and pretend the buyer is getting value . Very DFS last day of the sale

I live in the East Midlands (but right on the border of the south east) and I’m definitely seeing the same. Seeing some great deals, but also seeing some ridiculously over inflated prices. Sellers have their heads in the sand

 

[jaymie]

^ yeah I mentioned about this before earlier on. There is an application you can download to chrome to see how much they have increase/reduce on Rightmove

 

[Yel]

Around here you see a picture of a house on Rightmove and think that's not too bad for 450k. Then you realise it's a already smal lhouse chopped up into two and that's just for one floor with one bedroom and one boxroom with the extra hassle and expense of being leasehold.

 

[jaymie]

Super dumb question. Can someone explain to me how remortgage to fund your renovation/extension works. I am struggling to understand this.
On IG, many people said that they remortgage to fund their 100k extension but how does it really works?

 

[HoGi]

Super dumb question. Can someone explain to me how remortgage to fund your renovation/extension works. I am struggling to understand this.
On IG, many people said that they remortgage to fund their 100k extension but how does it really works?

Say you owe £100k on your house and the value of the house is £200k so you have £100k equity. You release some of that equity by increasing your mortgage.

Most won't let you drop below 20% LTV so in the above example you would only be able to release a maximum £60k. However it obviously increases monthly repayments and/or the term.

 

[Meg78]

I’ve now reached a point where I’m playing the lottery hoping for a win just so I can afford a mortgage

 

[RandomUser12345]

My tenancy is ending in a few months and me and my housemate would love to stay on but we're already at nearly the limit of our budget and with electric / gas and council tax all going up (and presumably our landlord will increase the rent too) I'm tempted to move back in with my parents and just save as much money I can with the hope of potentially buying in the next year or so if the prices do drop. I'm not sure if it's even possible to buy a property by myself as a single person though. I could potentially rent a room out if I got a 2 bed but not sure if that would count as 'income' towards getting a mortgage. Need to speak to a mortgage advisor really but I just hoped we'd be able to stay on as have loved living here but it's literally unaffordable looking at projected coats etc. We got lucky with getting a good fixed electric /gas tariff just as we moved in so our bills are really decent but obviously that would change when our fixed tariff ends.

 

[Yel]

Down 1.4% last month according to the nationwide index. So that's about falling 4.5k on the average price.

Annual house price growth slows sharply in November

Annual UK house price growth slowed to 4.4% in November, from 7.2% in October Prices fall 1.4% month-on-month – biggest fall since June 2020 – following 0.9% drop in October

www.nationwidehousepriceindex.co.uk

 

[hydeist]

I'm not sure if it's even possible to buy a property by myself as a single person though. I could potentially rent a room out if I got a 2 bed but not sure if that would count as 'income' towards getting a mortgage.

Generally you're allowed to rent a room out on a normal mortgage if you also live in the property, but most banks won't count it towards your affordability (since you don't actually HAVE a lodger for income at the time of the check, if that makes sense). There are probably specialist lenders for this type of thing though if you shop around.

 

[Yel]

they hit the nail right on the head

Falling house prices: the best news ever or the end of your life? Take our quiz

SHOULD you be overjoyed that house prices have hit a two-year low, or is your life no longer worth living? Find out with our quiz.

www.thedailymash.co.uk

 

[Notworthy]

My tenancy is ending in a few months and me and my housemate would love to stay on but we're already at nearly the limit of our budget and with electric / gas and council tax all going up (and presumably our landlord will increase the rent too) I'm tempted to move back in with my parents and just save as much money I can with the hope of potentially buying in the next year or so if the prices do drop. I'm not sure if it's even possible to buy a property by myself as a single person though. I could potentially rent a room out if I got a 2 bed but not sure if that would count as 'income' towards getting a mortgage. Need to speak to a mortgage advisor really but I just hoped we'd be able to stay on as have loved living here but it's literally unaffordable looking at projected coats etc. We got lucky with getting a good fixed electric /gas tariff just as we moved in so our bills are really decent but obviously that would change when our fixed tariff ends.

If you have been good tenants then have a chat with your landlord as plenty of landlords will fix the rent to keep good tenants. Just depends on their situation. I know my Sister didn't increase the rent for 5 years.

 

[btw]

We lucky sold in the past 3 months and are due to move before Christmas. However friends of ours have been trying to sell since August.
The estate agents have spoken to them and have said that in January, it’s the time of year when they see more people putting their houses on the market and with the current situation, houses being added to the market from January 2023 will more than likely be valued less then what they would of been throughout 2022. So they’ve advised our friends to drop their house price.

 

[Potatopotaato]

My next door neighbour has listed their house, they put it on 3 weeks ago for 50k more than we paid for ours (bought early 2020, we've front and rear extensions, loft conversion with ensuite, downstairs loo and are end terraced whereas they are mid and no extensions).

Decoratively it's tidy but that's a matter of opinion anyway! They've already had to reduce 25k and although they're getting a couple of viewings I can't see it selling till another reduction. Pretty much every house that's gone on in the last 2 months here has now dropped the price.

We have a 5 year fixed rate mortgage, by the time that comes to an end with the overpayments we've made I hope we'll have around 75% LTV if prices go back to 2020 levels - a correction is definitely needed.

 

[Former_Antelopee]

The apartments have at least dropped in my area. I got my offer accepted this time last year, completed in May. For me it was either an apartment in a better area or a house in an area that was worse. I went for the house as I wanted a garden and the area seems fine so far, it’s on the edge of the worse area so it’s quiet. The apartments in the better area have gone down in asking price by 10-15k since I was looking

 

[Anne1448]

A lot of Airbnbs are now for rent as well especially in the countryside. The rents are still twice the mortgage tho which is insane.

I can only assume that less people are booking holiday homes and are tightening their belts during this inflation.