House Prices #3 Property market, buying and selling

[Yel]

I did read a report yesterday that must have been that. I laughed too, no way is the correction going to be 2%, add a zero on minimum. I anticiapte prices will be below pre covid levels by June at the latesst.

Yeah it's a bit silly. I get that they're biased so have to present dishonest info but they'd be better off saying they expect falls of 8% or something. Even that is very optimistic.

Once they start to fall (as they have) it'll build some steam before it stops.

I'm noticing quite a few auction properties they cancelled auctioning this month and have delayed until feb next year. I wonder if it's an end of tax year thing so that with 8 week competition it won't be until the next tax year? As stability seems a long way off for property.

 

[Yel]

At least Halifax is giving a fall that's within the realms of possibility, even if it's still very biased and wishful

 

[Meg78]

All this uncertainty of mortgage rates is worrying for everyone - both first time buyers and people with existing mortgages. I was lucky enough to buy my first house when I was 28 and I didn't have help or handouts from parents, I just worked super hard in two jobs across 6 days a week, working a day shift on a Friday and then an evening shift as well so I was working 7 full time shifts across 6 days. If I had to do it again, I just couldn't. I'm a lot more tired now I'm 32.... things really change when you hit 30s! I bought for 75k by myself and last time I got the house valued for sale was last year and I had varying valuations between 120k to 140k. I now have a partner and we want to buy together at some point but he lives in a council flat that he wants to buy himself before we look for one together. He always says he needs to "catch up to me" and feels like he is behind and also doesn't want to put all his eggs in one basket by getting rid of his council flat and then if our relationship didn't work out he doesn't have the security of somewhere he can go back to if we ended up having to sell and split what we got together. It's very frustrating because I just can't see when he will be able to buy his flat any time soon. He has a poor credit rating and whilst he is now in a well paid job, it's a task and a half trying to get his credit out of the dumps. And I wouldn't want to buy something over priced with excessive interest rates. I do worry what the costs of my mortgage will be when it comes up for renewal in about 17 months. I only pay £417 at the moment on a 4 bed but I do overpay it each month.
If I was just starting our by myself now, I would not be able to get into anything more than a 1 bed flat.

How is he planning to apply for a mortgage with you when he already has a mortgage on his flat? Affordability-wise even as a buy-to-let he’d need to demonstrate he has the income or savings to cover the rental in the event there’s no tenant. The bad credit rating will follow him around for years, I’m not so sure this is a feasible plan. It’s scary giving up the safety net, but it’s something other couples do every single day, he should concentrate on repaying debt, then saving, and that can be his safety net instead.

If you do decide to buy together, please get a Deed of Trust drawn up!

 

[JSK90]

How is he planning to apply for a mortgage with you when he already has a mortgage on his flat? Affordability-wise even as a buy-to-let he’d need to demonstrate he has the income or savings to cover the rental in the event there’s no tenant. The bad credit rating will follow him around for years, I’m not so sure this is a feasible plan. It’s scary giving up the safety net, but it’s something other couples do every single day, he should concentrate on repaying debt, then saving, and that can be his safety net instead.

If you do decide to buy together, please get a Deed of Trust drawn up!

He doesn't have a mortgage on his flat yet, he still rents it from the council but he plans to buy it from them and then a few months after he has done that his plan is to rent it out and that's the point we would be looking at buying together. I don't see it all coming to fruition for a couple of years yet unfortunately.

I agree, couples give up the safety net all the time but he isn't willing to do that. I think because I own my house already, he feels he needs to own something as well.

We did explore bypassing him buying the flat and just buying together and I would either sell or rent mine out. But he put forward a very unsavoury caveat that he would want an agreement that if things did go wrong between us and we had to separate, that he would get the house we bought together and i would just walk away and go back to my current house. He said this was "insurance" for him because he would be giving up his security of his council flat and he wouldn't want to be left homeless. I did provisionally say I would do that but I would want my half of the deposit back for the house but in the end we agreed he would just continue to pursue buying his flat and then when we have our own house alongside that, if we did split up we would just separate proceed of sale 50/50 down the middle which sits a lot better with me. I don't want to feel like I'm setting myself up to make a big financial loss.

 

[judgejohndeed]

I appreciate this isn’t a relationship advice thread but there is no way on this planet I’d be happy to buy something with someone who even SUGGESTS I should just walk away and let him have it if the relationship ends! It doesn’t sound like he would even be able to afford a mortgage on a house by himself which he would have to be checked for as part of taking you off it, and presumably it means you’d lose your share of the deposit as he won’t have the cash to buy you out. Given this guy’s financial history and situation, I’m sorry to say it but it sounds like he’s trying to milk you @JSK90.

 

[Notworthy]

I appreciate this isn’t a relationship advice thread but there is no way on this planet I’d be happy to buy something with someone who even SUGGESTS I should just walk away and let him have it if the relationship ends! It doesn’t sound like he would even be able to afford a mortgage on a house by himself which he would have to be checked for as part of taking you off it, and presumably it means you’d lose your share of the deposit as he won’t have the cash to buy you out. Given this guy’s financial history and situation, I’m sorry to say it but it sounds like he’s trying to milk you @JSK90.

Please will someone stop council homes beimg sold off to chamcers like this.

 

[zetta buttons]

Surely if he owns his council house and then is buying a second home with you, you will have to pay the increased rate of stamp duty (extra 3%)?

 

[Meg78]

He doesn't have a mortgage on his flat yet, he still rents it from the council but he plans to buy it from them and then a few months after he has done that his plan is to rent it out and that's the point we would be looking at buying together. I don't see it all coming to fruition for a couple of years yet unfortunately.

I agree, couples give up the safety net all the time but he isn't willing to do that. I think because I own my house already, he feels he needs to own something as well.

We did explore bypassing him buying the flat and just buying together and I would either sell or rent mine out. But he put forward a very unsavoury caveat that he would want an agreement that if things did go wrong between us and we had to separate, that he would get the house we bought together and i would just walk away and go back to my current house. He said this was "insurance" for him because he would be giving up his security of his council flat and he wouldn't want to be left homeless. I did provisionally say I would do that but I would want my half of the deposit back for the house but in the end we agreed he would just continue to pursue buying his flat and then when we have our own house alongside that, if we did split up we would just separate proceed of sale 50/50 down the middle which sits a lot better with me. I don't want to feel like I'm setting myself up to make a big financial loss.

The stamp duty/capital gains tax involved with owning more than one property is definitely something to show him, it could be tens of thousands of pounds he has to pay to keep ahold of that safety net!

If you do decide to buy somewhere with him, please do not agree to 50/50 if it goes south, protect your own investment! You’ve been paying into your own mortgage, if you joined with him you can ask the solicitor to make it that you’re tenants in common, so they write down exactly what each of you brings in at the start, and if you split you agree to each keep your same initial share, and then any equity built after that is split 50/50. It’s something I did with my husband when we first purchased and would recommend to everyone, break ups can get nasty quickly and much as you know you would act fairly there’s no guarantee that he would, you’ve worked hard for all that you have so far, please protect it

 

[theweekend]

Buy a council flat to… Rent it out.. Amazing

 

[harveydean]

He doesn't have a mortgage on his flat yet, he still rents it from the council but he plans to buy it from them and then a few months after he has done that his plan is to rent it out and that's the point we would be looking at buying together. I don't see it all coming to fruition for a couple of years yet unfortunately.

I agree, couples give up the safety net all the time but he isn't willing to do that. I think because I own my house already, he feels he needs to own something as well.

We did explore bypassing him buying the flat and just buying together and I would either sell or rent mine out. But he put forward a very unsavoury caveat that he would want an agreement that if things did go wrong between us and we had to separate, that he would get the house we bought together and i would just walk away and go back to my current house. He said this was "insurance" for him because he would be giving up his security of his council flat and he wouldn't want to be left homeless. I did provisionally say I would do that but I would want my half of the deposit back for the house but in the end we agreed he would just continue to pursue buying his flat and then when we have our own house alongside that, if we did split up we would just separate proceed of sale 50/50 down the middle which sits a lot better with me. I don't want to feel like I'm setting myself up to make a big financial loss.

You’re unable to buy from the council and rent it out. There are lots of rules surrounding the sale (my best friend bought hers.) To do that you need a buy to let mortgage, and there’s no way the council would allow it. This guy sounds like he’s living in cuckoo land

 

[wearedoomed]

He doesn't have a mortgage on his flat yet, he still rents it from the council but he plans to buy it from them and then a few months after he has done that his plan is to rent it out and that's the point we would be looking at buying together. I don't see it all coming to fruition for a couple of years yet unfortunately.

I agree, couples give up the safety net all the time but he isn't willing to do that. I think because I own my house already, he feels he needs to own something as well.

We did explore bypassing him buying the flat and just buying together and I would either sell or rent mine out. But he put forward a very unsavoury caveat that he would want an agreement that if things did go wrong between us and we had to separate, that he would get the house we bought together and i would just walk away and go back to my current house. He said this was "insurance" for him because he would be giving up his security of his council flat and he wouldn't want to be left homeless. I did provisionally say I would do that but I would want my half of the deposit back for the house but in the end we agreed he would just continue to pursue buying his flat and then when we have our own house alongside that, if we did split up we would just separate proceed of sale 50/50 down the middle which sits a lot better with me. I don't want to feel like I'm setting myself up to make a big financial loss.

Please please please leave this guy. You can do better than this.

 

[Anne1448]

This guy is taking advantage of you.

He is using you to be able to buy the house since his credit history is bad and he doesn't have the cash. If you walk away from this property he'll never be able to repay you the equity that you put into it (stamp duty, downpayment and any additional payment).

Too many people get taken advantage off for the sake of "buying together". Let him buy his own property while you keep your own and you guys can live in either one of them.

 

[Tove_drew]

I think everyone is painting this guy as some mastermind manipulator. To me it sounds like he’s bad with money and doesn’t understand processes (the fact he thinks he will be able to rent out his buy to own council flat). He also sounds selfish and in a very different place financially and work wise to OP. It’s not a good match

 

[Yel]

So that's the nationwide predicting prices to be 5% lower than pre covid? So about 25%?

Nationwide House Price Review and Forecast: A relatively soft landing is still achievable

• Housing market remained remarkably resilient with annual house price growth in double digits before the mini-Budget
• Hard for the market to regain momentum with economic headwinds set to strengthen
• Relatively soft landing may still be achievable in 2023, with activity stabilising modestly below pre-pandemic levels and house prices edging lower, perhaps by around 5%

Nationwide House Price Review and Forecast: A relatively soft landing is still achievable

Housing market remained remarkably resilient with annual house price growth in double digits before the mini-Budget Hard for the market to regain momentum with economic headwinds set to strengthen Relatively soft landing may still be achievable in 2023, with activity stabilising modestly below...

www.nationwidehousepriceindex.co.uk

 

[FOD's missing hairbands]

So that's the nationwide predicting prices to be 5% lower than pre covid? So about 25%?

Nationwide House Price Review and Forecast: A relatively soft landing is still achievable

• Housing market remained remarkably resilient with annual house price growth in double digits before the mini-Budget
• Hard for the market to regain momentum with economic headwinds set to strengthen
• Relatively soft landing may still be achievable in 2023, with activity stabilising modestly below pre-pandemic levels and house prices edging lower, perhaps by around 5%

Nationwide House Price Review and Forecast: A relatively soft landing is still achievable

Housing market remained remarkably resilient with annual house price growth in double digits before the mini-Budget Hard for the market to regain momentum with economic headwinds set to strengthen Relatively soft landing may still be achievable in 2023, with activity stabilising modestly below...

www.nationwidehousepriceindex.co.uk

I don't read it that way. I think they are saying (probably inaccurately) that prices will drop by 5%. I think the pre-pandemic reference is related to activity- so number of people moving etc?

 

[Yel]

I don't read it that way. I think they are saying (probably inaccurately) that prices will drop by 5%. I think the pre-pandemic reference is related to activity- so number of people moving etc?

Yep you must be right, as even if Nationwide thought they'd fall 25% they'd never actually say it.

But it seems like a forgone conclusion that the 20% covid gains will more or less be wiped out pretty soon.

 

[Meg78]

Rightmove in my local area has exploded today, hundreds of listings….. and all are overpriced as if the downturn isn’t happening They have now changed from “offers over” to “guide price” though, so I assume that means they’re expecting negotiations?

 

[HoGi]

Rightmove in my local area has exploded today, hundreds of listings….. and all are overpriced as if the downturn isn’t happening They have now changed from “offers over” to “guide price” though, so I assume that means they’re expecting negotiations?

I noticed that too.

There is a house 0.25 miles from mine which is a 3 bed semi in pretty poor condition. Huge garden but not a lot else going for it. It is up for £365k and the description says guide price 375k to 395k!

That is about 75k more than it is worth and about 100k more than pre covid prices.

 

[SpindleWhorl]

I'm not bothered about house prices going down as I have plenty of equity and it should just make my upsize more affordable. But I feel for those who've taken out 90%/95% mortgages over the last year, I'd be terrified.

 

[Anne1448]

I really felt bad this Summer after failing to get an offer accepted (Americans and Germans were bidding an extra 100k on everything) but now it feels like a massive relief.

Especially when I see the amount of properties back on the market with a price reduction.